Correction: The GLD Exchange Traded Fund did not convert to a Debenture officially,
or in any manner, my gross error.
The South African Exchange had
a listing which confused the two
investments bearing the same trading
symbol. My error, due to excessive
zeal. But it remains true that
investors of GLD gold are the laziest,
most deluded, and most clueless
members of the entire gold community.
They are devoted to a horribly
corrupt fund. The exception is
the juice junkies who are basic
addicts of leverage, and the peculiar
types who use the fund to hedge
next to a temporary gold position.
My apology for a wrong sensational
story. In the meantime, the GLD
Fund is being drained of its gold
inventory to supply the gold cartel
its fodder, under the sleepy dopey
noses of its investors, who own
no metal, and will never see a
single bar of metal. Even legitimate
requests by authorized investors
are being denied. The capture,
seizure, and rehypothecation of
the GLD gold bars is a final stage
in the great gold game sequence,
a signal of the climax near.

QUOTES ON MONEY

"I
consider it imperative that we
do what we can to promote a very
strong recovery. I do not see
the program as continuing indefinitely.
We are attempting to assess whether
or not we have seen meaningful
progress in the labor market.
What the [Fed's policy] committee
is looking for is signs we will
have growth that is strong enough
to promote continued progress." ~ Janet Yellen

(before the Senate Banking Committee on the approval process, who made clear
the USFed intention to continue
the hyper monetary inflation (as
backdoor Wall Street bailout),
until officials were confident
a durable economic recovery was
in place that could sustain job
creation (THUS NEVER SINCE USFED
POLICY KILLS CAPITAL), as current
policy benefits outweigh the costs
(for big Wall Street banks), citing
no timetable for ending ZIRP or
QE (expect until a significant
bank or derivative breakdown or
even the USGovt debt default),
exhibiting full denial that a US
stocks or housing markets were
in a bubble (overlooked USTreasury
Bond market being the biggest asset
bubble in human history), boasting
diligence to spot risky financial
behavior (overlooked abuse of interest
rate derivatives that sustain the
bond bubble), and promising to
use policy to prick future asset
bubbles (already tried that with
Taper Talk trial balloon), while
arguing that higher capital and
liquidity at the biggest US banks
was a high priority (too late,
since dead insolvent zombie monsters),
the Reuters reference (CLICK HERE).
She might be soft spoken now, but
by next September with all the
pressure to print and redeem, she
will be yellin.

"The
new chairperson's hopeful view
is detached from reality. In
a critical upshot of years of
flawed policymaking, central
bank liquidity these days greatly
prefers Bubble securities markets
to real economies. Having now
fueled a full-fledged global
securities market Bubble, there
will be no returning to a
more normal approach to monetary
policy. It is a myth in the
same vein as the Fed's 2011 Exit
Strategy. It is now a matter
of how long until this how-crazy-do-things-get
phase runs its fateful course.
I sympathize with Dr Yellen. Her
predecessors were never held
accountable. Deeply flawed economic
doctrine has yet to be called
out. History's greatest monetary
experiment has not yet run its
course. Inflationism, with the
contemporary version cloaked
in sophisticated and elegant
rationalizations, is widely accepted
by policymakers, Wall Street,
the media, and popular commentators
alike. Meanwhile, the great
flaw in discretionary monetary
policymaking has come to fruition. A
major error has ensured a series
of ever greater policy blunders
and a course toward catastrophic
failure. It is an unbelievable
fiasco, and I do not see how
this historic Bubble does not
burst on her watch." ~ Doug Noland (a parallel view to
the Jackass, but from a higher
vantage level, to his credit)

"We
the People of the United States hereby establish an unlimited Government
that can impose its will in any
manner it chooses, on any subject
that it wishes, with constraints
or accountability notwithstanding.
Furthermore, our Government shall
borrow as much money as possible
to cover up the toxic bonds and
fraud crimes and institutional
insolvency of the banker elites,
to issue unlimited volumes of
gifts disguised as loans to its
global banking cohorts, to provide
the good life for the lazy and
the malingerers within this once
great nation, and to shift our
financial burdens far into the
future to be paid by our unfortunate
progeny." ~ Adapted Preamble to the Nazi Manifesto
(cooperative effort with Darrell-D
in Colorado)

"We
have never been in a more dysfunctional
state at the corporate, political,
and individual level in history.
It is time to realize that the
reason capitalism won the war
against communism in the 1980s
was its strong market based economy,
itself based on price discovery.
Now the policymakers in their
wisdom are copying everything
a planned economy entails: central
planning and control, no price
discovery, one supplier of credit
and money, with the corollary
effect of suppressing small & medium
sized enterprises, even individuals." ~ SAXO (it is not wisdom, but desperation since no policy options exist except
to continue building the American
Politburo monstrosity, given
the national directive couched
in refusal to liquidate the big
banks and in obstruction to permit
the markets to seek equilibrium)

"If
the Saudis take the lead in pulling
the plug on the Petro-Dollar,
it will be an implicit signal
to declare acceptance also of
Euros and Yen and Chinese Yuan
as payment for crude oil shipments.
They will do it after inviting
the Chinese Army to protect them.
They might actually wait until
the newly appointed USFed Chair
Janet Yellen orders the next
round of QE bond purchases. Then
the Saudis can lay the ultimate
blame on the Fed, which is cornered
and exposed. They deserve the
blame." ~ EuroRaj

"It
is as though the Euro Central
Bank were acting as a purchasing
agent of German savings, which
it then services and distributes
to the crisis countries at whatever
conditions it deems appropriate." ~ German economist Hans Werner Sinn
(preview the coming departure
of Germany)

"These
fools think they are monetary
gods. Instead, the central bankers
are mad destructive scientists
whose work is founded in heresy,
whose output is lost wealth and
wrecked engines of wealth. What
they do is basic bloodletting,
like medieval doctors pretending
to practice medicine. Out of
view, they steal other nation's
gold reserves, exposing the Modus
Operandi of nazis." ~ Jackass

"The
war on drugs brought in more
drugs, and the war on terror
created more terrorists. Maybe
next year we can have a war on
money and jobs, and see where
it goes." ~ Anonymous

## INTRO MONETARY FRAGMENTS

◄$$$ INDIA'S GOLD REFUGE FROM THE ESTABLISHMENT WILL
DAWN ON THE WESTERN SOPHOMORIC
NITWITS, ALL IN TIME. GOLD IS THE
PROTECTION AGAINST BOTH BANKER
INFLATION AND POLITICIAN LARGESSE.
THE WEST HAS FORGOTTEN, BUT WILL
LEARN FROM THE WISER EASTERN ELDERS.
$$$

The Indian Govt policymakers understand full well the family challenge, captured
in their demand for gold as protection.
Foreign nations are under siege
from the USDollar inflation waves,
as well as their own governments
which hand out money to extend
the socialist system and to buy
votes. The public understands that
gold is the only refuge from inflation
for the Indian population. However
that viewpoint and strategy must
be resisted, since it is not acceptable
to The Establishment. The Indian
Govt debt has been run up by politicians
amidst a corrupt ruling class and
badly inefficient bureaucracy.
The citizens will continue to patiently
accumulate real wealth one gram
at a time, one kilogram at a time,
one bar at a time, just like they
have over many centuries. In
the Western nations, the people
are not accustomed to the brand
of inflation levels, government
confiscation, and currency volatility
so common in developing market
nations. They will be caught
off guard, already happened. The
need to own gold as protection
is not fully appreciated in the
West. The people of the Western
nations pay lip service to how
gold serves as an inflation hedge
or acts a supreme currency, even
a safe asset. They are bombarded
by propaganda of the huge decline
in Gold from the 1980 peak, as
well as by altered data that price
inflation is not present. They
are told that Gold pays no interest
income, but neither do the USTreasury
Bills or bank saving certificates.

Those in the West who have a solid understanding of gold and its value are
in the extreme minority, denigrated
by the propaganda merchants. However,
the times are changing; the winds
are blowing against the USDollar
regime; rebellion is growing its
ranks. The fascination with the
fiat dollar will prove to be a
passing fad for this generation,
sure to be deeply impoverished
for their stupidity, ignorance,
stubborness, and gullibility. Its
younger generation is equally duped
and discouraged. They will awaken
very late to learn that Gold is
the only safe money alternative,
and that the Gold Standard ensures
stability, equitability, even promoted
capitalism and wealth. The search
for jobs will lead to the golden
paths. See the Zero Hedge article
(CLICK HERE).

◄$$$ ITALY PLANS TO OFFER GUARANTEES ON GOVT BOND
DERIVATIVES. THEY APPEAR TO BE
LAYING THE GROUNDWORK FOR ISSUING
NON-EURO DEBT. THEY MIGHT BE CONSIDERING
DEBT IN CHINESE YUAN, WHICH WOULD
BE A MAJOR BLOW TO THE EURO AND
USDOLLAR BOTH. $$$

The Italian Govt Treasury announced plans to introduce a system of bilateral
guarantees for derivative contracts
that involves domestic government
bonds signed with national and
foreign banks. They seem intent
on helping lenders to manage risks
toward facilitating their debt
sales. Under the planned system,
the Italian-based Treasury and
the banks would exchange cash amounts
on a short-term basis, in response
to mark-to-market changes with
respect to their respective derivatives
positions. A local Treasury
official told Reuters the new system
would help Italy issue debt denominated in currencies other
than Euros. The hedged insurance
would be too costly without the
collateral guarantees, thus the
evolving necessity. Such activity
is complex, requiring sophisticated
hedges against currency risks through
derivatives contracts. Conclude
that Italy might be paving the
way toward sovereign bond issuance,
but denominated in Chinese Yuan.
If Italy issues
debt securities in CNY, it will
be a major blow to the EUR and
to the USD, the bell heard around
the world. At the same time, it
would immensely raise the stature
of the CNY as a global currency.
See the Reuters article (CLICK HERE).
Time has run out for Italy in
juggling and bungling the mass
of cobwebs linked to sovereign
debt, its bank derivatives. The
moment has arrived for Italian
Govt debt, with which Wall Street
and London
have effectively strangled the
nation. They might be forced to
borrow in Chinese Yuan currency
to exit the mess. See the Reuters
article (CLICK HERE).

European jobless young are legion. In the broad EuroZone, youth unemployment
has hit 24%. A grand pathogenesis
is in progress. Failure to adopt
sound money has resulted in rampant
inflation which has methodically
destroyed the system's capital,
spitting out qualified workers
to the streets. New records
were set in Spain (56.5%), Greece (57.3%), Italy (40%), and France (26%) for jobless rate. Governments that
allow youth unemployment to escalate,
do so at their own peril, as social
disorder follows. Talented Spanish
young professionals are fanning
out across the entire Latin American
regions. In the process, Spain is losing its most qualified generation
ever. For too many countries,
the delicate balance of power between
labor and capital has shifted in
the favor of capital. As a consequence,
employers can demand such low wages
that they seem to exploit the workers. The United
States is
not above the jobless scourge.
Since 1994, a Rubin trick sought
to remove all trace of unemployed
workers who have not actively searched
for a job in the previous four
weeks. The inocuous 7% to 8% jobless
rate rings hollow against the reality
of a 23% jobless rate, according
to Shadow Govt Statistics. The
old method was the more accurate.

A cannibalization process has hit the capitalist economies
that have forgotten capitalism
and resorted to financial engineering,
to their own destruction. The present course is not the capitalist serpent eating its own tail, as Karl
Marx would describe (gloat).
It is instead the destructive
consequence of unsound money,
currency with an implied debt
foundation, and the implosion
of financial structure from excess
debt. The astute preachings of
Ludwig Von Mises would advocate
a quick fix of return to the
Gold Standard, and immediate
big bank liquidations, precisely
the Jackass remedy. See the Testosterone
Pit article (CLICK HERE).
It is astonishing how few smart
analysts fail to comprehend the
consequence of unsound money,
the monetary cancer, and its
effect on capital within an economy.
The Jackass do.

◄$$$ PAUL CRAIG ROBERTS WARNS TO EXPECT A FRIGHTENING BLACK SWAN EVENT,
A GLOBAL USDOLLAR REJECTION. ROBERTS
COMPREHENDS THE OUTCOME, BUT NOT
THE PATH. THE USFED CAN PRODUCE
EXTERNAL USDOLLAR DEMAND, THE ROBERTS
ERROR. HE DESCRIBES THE GLOBAL
REJECTION WILL COME AS A RETURN
TO THE GOLD TRADE STANDARD, THE
EUROPEANS TURNING EASTWARD, THE
SAUDIS ABANDONING THE PETRO-DOLLAR,
WHICH WILL COMBINE TO KILL THE
USDOLLAR. MANY KEY EVENTS WILL
FOLLOW IN THE DEATH WAKE. A GRAND
GLOBAL SHUN HAS BEGUN. $$$

After a prefatory message on the nasty situation on financing the Social Security
and Medicare, Paul Craig Roberts
warned of a severe global reaction
to the USDollar generally, a rejection.
The official finances are a wreck,
the hidden impact to the USGovt
deficit coming from a series of
costly wars, as he points out.
The response globally to the toxic
condition of official finances
seen in USTreasury Bonds and the
reckless behavior from refusal
to make spending cuts, in addition
to the travesty of the USGovt shutdown,
will be for the world to work
around the USDollar, to isolate
it, and to diversify away from
it. Roberts is the former Treasury
Asst Secretary in the Reagan Admin.
He stated the following. See the
King World News interview (CLICK HERE).

"[The
USGovt finances have] almost
insurmountable problems. We have
experts that have estimated the
cost of these wars is $6 trillion. Well,
that is most of the debt increase.
But they do not talk about that
because the Military Industrial
Complex is just too strong. But
when you shrink aggregate demand,
the economy goes down, and the
deficit gets bigger. So, they
are trapped. I do not think they
can get out of this. The foolishness
[in Washington] is going to lead to more removal from the use of the dollar.
Foreigners are just going to
stop using it. We already
see it happening.

This
shows a fantastic erosion in
American financial influence.
You see the BRIC's settling their
trade differences without using
the dollar. You even see our
puppet state, Australia,
is now settling its trade balance
with China in their own currencies, aborting the dollar.
This means there are decreased
demand for dollars which means
a lower price [in US$ exchange
rate]. The Fed can print money
all day to keep the price of
bonds high, but they cannot print
foreign currencies to buy dollars. [WRONG!!!
says the Jackass] So, that is
the real black swan that is waiting
to happen. When does the dollar
plummet? When can the Fed not
get enough loans of foreign currencies
to buy back the dollars? When
that happens, then it is all
over. They lose control. The
interest rates skyrocket, bonds
collapse, stocks collapse, real
estate collapses (in real terms),
and the deficit becomes huge.
I mean really huge. So the whole
situation is headed to hell in
a hand basket."

Roberts is incorrect on one important point. With the Dollar Swap Facility, the
USFed can print more USDollar
currency, and have its European
partners use the newly hatched
money to demand USDollars.
The result is support of the
USD and a lower Euro, the precedent
seen in 2010 and again in 2011.
The Euro Central Bank executed
$2.3 trillion in such USDollar
demand off the Dollar Swap facility
at that time, which lifted the
USDollar. So the USFed can fabricate
USD demand, which in reality
is more like support of all the
major currencies. In fact, the
group of major currencies (USD,
Euro, BPound, Japanese Yen, Swiss
Franc) will all remain lashed
together and fall together, but
versus the Gold price. The gold
meter will return to manifest
the magnificent USDollar devaluation
on the global stage, which will
occur simultaneously with a big
devaluation in all major currencies,
according to Roberts. This is
the essence of the Global Currency
Reset, better described as the
return to the Gold Standard.
The Jackass disagrees strongly
with this wrong viewpoint on
an event sequence. It is Game
Over for the USDollar when four
events occur. 1) The major currencies
will join the Gold Trade Standard,
and leave the United States in its toxic backwater. 2) The
Saudis and other significant
oil producers will accept non-USD
payment for shipments. 3) Sovereign
nations and corporations (US & foreign)
will issue debt securities denominated
in Chinese Yuan. 4) The USD will
be forced to split and be heavily
devalued versus the major world
currencies. Its wretched
fundamentals will catch up with
it. The world is demanding a
different USD for bank assets
outside the US jurisdiction, as a consequence to the tremendous
debasement in progress by the
USFed itself in monetary expansion.
Permission will be given for
the USFed to continue its work,
but with the new domestic USDollar.
It will be wrecked.

Beware that London and Frankfurt are
already lining up to sell Yuan-based
bonds. McDonalds of US infamy as
purveyors of fatty dross has Yuan-based
corporate bonds on its books. On
an increasing basis, global players
wish to avoid the USDollar in financial
deals, due to rampant corruption
and profound bond fraud, if not
basic official debasement. They
cannot force a solution directly.
Therefore they will force a solution
by avoidance, rejection, and a
grand global shun. Clearly the
death blow to the USDollar will
be the reinstallment of the Gold
Trade Standard together with the
departure from USD-based crude
oil sales by the Saudis and OPEC. A
grand sequence will be played out.

◄$$$ PRESIDENT OBAMA'S FINANCE TEAM IS RECOMMENDING A ONE PERCENT (1%)
TRANSACTION FEE (TAX) ON ALL BANK
TRANSACTIONS. ALTHOUGH NOT YET
LAW, EXPECT IT TO SLIDE THROUGH.
THE TAX WOULD IMPOSE A GREATER
BURDEN ON THE USECONOMY, AND PAY
HOMAGE TO THE BANKING ELITE FROM
THEIR SYNDICATE. $$$

The proposed Congressional bill calls for a 1% tax on all bank transactions,
under the name HR 4646. The levied
tax would hit all money movements,
whether going in or going out,
much like a toll taker on a highway.
The tax would apply to all transactions
at any financial institution, such
as banks, credit unions, savings & loans,
and possibly mutual fund investment
houses. Furthermore, in January
2014, the USGovt will require all
citizen (syndicate subjects) to
use direct deposit for Social Security
income checks. They could not enact
the carbon tax on the air we breathe,
so they will tax the blood flow
instead. Bear in mind that police
authorities are monitoring car
movements in addition to the USGovt
monitoring telephone and email
communications. Some day bedroom
activity might suffer the thrust
of a tax levy. The police state
is merging with the socialist state,
the bankruptcy clear.

China's cross-border trade settlements
in its national currency totaled
CNY 8.6 trillion (=US$1.4 tn) by
the end of September, since the
program's launch in July 2009.
Cross-border Yuan transactions
have been conducted in 220 countries
and regions using the Yuan currency,
also known as renminbi (people's
money). The grand list of nations
with which the Chinese Govt has
signed currency swap contracts
has reached 23 countries and regions,
as of end September, according
to the Peoples Bank of China,
their central bank. It qualifies
as a global critical mass in a
settlement alternative to the USDollar.
The southern province of Guangdong is the pioneer of cross-border
Yuan transactions, the interior
model. Its cross-border trade settlements
in renminbi totalled CNY 3.2 trillion
by the end of September, as 22
thousand enterprises as well as
2189 bank outlets conduct the business.
The practice of cross-border transactions
began with trials for Yuan trade
settlement in in 2009 with participants
from Hong Kong, Macao, ASEAN countries, and selected
other locations. The scheme has
been extended to all parts of China,
as well as to many nations of the
Western world, including Australia and New
Zealand. The
parallel program, the Yuan Swap
Facility, is being installed in England, France, Switzerland,
and Germany in the heart of Western
Europe. The culmination was the
October signing by the PBOC and
the European Central Bank for a
CNY 350 billion currency swap agreement,
bringing the volume of currency
swap deals to 2.2 trillion Yuan
in total. See the China Daily article
(CLICK HERE).

◄$$$ CHINA HAS AGREED TO A MEMO OF UNDERSTANDING BETWEEN
THE FDIC AND THE CHINESE CENTRAL
BANK. THE EXCHANGE OF INFORMATION
WILL BECOME MORE FORMAL. REGARD
THE MEMO AS PROTECTION FROM WALL STREET SUBTERFUGE AND CORRUPT PRACTICES
IN THEIR USUAL EXPLOIT. THE CHINESE
ARE LEARNING TO PLAY THE LEGAL
GAME. WHEN THE MELTDOWN OCCURS,
THE CHINESE INTEND TO BLOCK THE WALL
STREET HEAVYWEIGHT FIRMS FROM ANY
BIG FIRE SALES. $$$

A Memorandum of Understanding between the FDIC and Peoples Bank of China has been signed. The Federal Deposit Insurance
Corp is the official insurance
agency to guarantee deposits from
failed US banks. The
Chinese Govt is laying the groundwork
for some yet unspecified event.
By itself, the MOU is a nothing
burger, as described by a clever
colleague. But it does spell out
details for information exchange
between the FDIC and PBOC. The
main question pertains to why the
agreement comes now. In the end
game, which clearly is within view,
some financial firm as a large
dominant player (as hunch Goldman
Sachs) will try some shady devious
maneuvers as hanky panky. The MOU
is in place to prevent it, by setting
up a protocol to follow. As EuroRaj
described, "If the banks
are going to declare insolvency
on the back of a derivative collapse
and do a bail-in grab on depositor
accounts, there will still be some
intrinsic value in the infrastructure
that the banks own in terms of
buildings, computer systems, intellectual
property, and staff expertise.
The PBOC must want this to be revealed
and understood in an open fashion,
in order to prevent the Wall Street
entrenched players from snatching
a banking franchise (such as JPMorgan
or Bank of America) for pennies
on the dollar."He noted
the predators are the usual suspects,
Goldman Sachs, Morgan Stanley,
even the large favored hedge funds.
See the FDIC website notice (CLICK HERE).

◄$$$ CHINA DOES NOT WANT THE CORRUPT BANKSTERS , NOT EVEN THE LONDON
METALS EXCHANGE, OPERATING INSIDE
THEIR NEW FREE TRADE ZONE. THEY
WANT TO MAKE IT A CAPITAL PARADISE,
FREE OF THE LONDON-BASED LME AND
OTHER BANKSTER ORGANIZATIONS. PLANS
ARE MANY, SO FAR THE RESULTS SPARSE.
CONCERN OVER FOREIGN COMPETITORS
AND PREDATORS IS STRONG. $$$

The bars are being constructed, as in barriers and not water holes. The rules
are being laid down. No Western
bankers are to be permitted, this
is the marquee posted sign. The
Chinese are establishing the rules
and guidelines for the Shanghai
Free Trade Zone, with a first blow
being a ban on overseas commodity
exchanges and their related warehouses. The
London Boys will be blocked, dashing
their expectations to invade the
trade zone. The complexity is clear.
At one time, the state-owned local
media had reported that commodity
warehouses would be authorized
in the free trade zone, not appearing
on a list of banned activities.
The Hong Kong Exchange is deeply
involved. Last year it invested
$2.2 billion to acquire the LME. Warehouses
on the Chinese Mainland seek legitimate
access from the world's biggest
marketplace for industrial metals. The
warehouse ban was issued by the
China Securities & Regulatory
Commission (CSRC) in 2008. Although
the Shanghai
officials hoped to have the LME
open storage facilities in the
zone, the concept ran into strong
opposition from the securities
regulator. They did not want the London challenge for control, or their usual exploit.

The Shanghai Futures Exchange (SHFE) currently lists futures contracts in copper,
aluminium, zinc, and lead, placing
it in direct competition with the
LME. The London
bankers and commodity professionals
have long desired to set up delivery
networks in China.
Their motives are suspicious though. Some
legitimate need exists, since many
Chinese manufacturers strive to
cut logistics fees and premiums
paid on top of LME contract prices
required to obtain the metal. The
Shanghai Free Trade Zone has been
billed as a watershed event for China's development. The Beijing leaders have promised to roll out a range
of ambitious reforms including
Yuan currency convertibility within
the next three years. Such convertibility
is a key item in reforms, in global
credibility, and in overseas debt
issuance. For the commodities markets,
the Shanghai
government has promised to open
up its prized futures markets to
foreign players and to allow local
firms to hedge on overseas bourses.
Some doubt has entered. A Shanghai-based
executive with a foreign bank is
involved in policy discussions.
He said "It seems like
there are concerns about control.
So there would likely be restrictions
on the types of foreign firms who
can participate, how much they
can invest, and how much profit
they can take out."

Under the latest rules, the SHFE would be allowed to set up an International
Energy Trading Centre in the zone,
from which it can open its overdue
crude oil futures contract and
other energy products to qualified
foreign investors. Brokers registered
in the zone will also be able to
trade on overseas futures exchanges
for local clients via the over-the-counter
market. Plans laid out in 2011
have not come to fruition, very
little realized to date. Word has
it that some within the Beijing decision body are worried about Chinese
firms being losers in a difficult
competitive arena with globally
savvy traders and financial institutions. Memories
are fresh of past bitter experiences.
A few large Chinese airlines and
shipping companies lost hundreds
of $millions in 2008 on derivative
trades made with international
banks when oil prices plunged.
The predators are numerous in London
and New
York, where the criminal bankers
operate. See the Reuters article
(CLICK HERE).

◄$$$ CHINESE US$-BASED DEBT HAS SOARED IN THE LAST THREE YEARS. THE GREATEST
EXPOSURE IS FOR BRITISH BANKS.
THE EASY MONETARY POLICY HAS RAISED
THE RISK IN CHINA. THE CONCERN IS TOWARD A REPEAT OF THE
ASIAN MELTDOWN. $$$

The BIS sees risk of a 1998-style Asian crisis as Chinese dollar debt soars.
The world's banking watchdog warns
that foreign loans to companies
and banks in China have tripled over the last five years to
almost $900 billion. The exposure
might be sufficiently large to
set off financial tremors in the
West. The biggest risk lies
with Great Britain. The
Bank for Intl Settlements offered
an official report on China, pointing out the fast rise since 2009
for the debt level from $270 billion
back four years ago. The issue
is US$-based funding. The Chinese
Govt reserve body SAFE claimed
81% of foreign debt under its supervision
is in USDollars terms, 6% in Euros,
and 6% in Yen. Since the loose
money policies began in 2009, ordered
by the Western central banks in
desperation, the cost of foreign
funding in East
Asia was also reduced, tempting
firms to borrow heavily in USDollars.
The seized the open window. The
risk comes from a possible end
to the USFed accommodation with
QE and ZIRP. The heightened concern
is for a repeat of the East Asian
crisis in 1997-1998. British-based
banks hold almost a quarter of
all cross-border bank exposure
to China, and the figure has risen since 2008. By
contrast, the more prudent German,
Dutch, French, and other European
banks have vastly cut back on their
share from 32% to 14%, the trend
being to fortify their capital
ratios at home. See the UK Telegraph
article (CLICK HERE).

◄$$$ THE BRICS NATIONS ARE INTEGRATING A NEW GLOBAL DEBT RATINGS AGENCY.
THE SECOND RIVAL TO THE BIG THREE
IS COMING BY THE NEW YEAR. THE
GLOBAL FINANCE SECTOR IS MOVING
AWAY FROM ITS US-CENTRIC AXIS.
$$$

Brazil, India, and South Africa are teaming to be part
of a new global ratings agency,
the joint international venture
called ARC Rating. It would serve the global financial sector, unlike the major debt rating agencies
that cater to the New York, London, and Western Europe banking community. The ARC agency is equipped with a
European Securities Markets Authority
(ESMA) licence and would issue
challenge to the dominant US tools. The
bias of Standard & Poors,
Moodys, and Fitch is fast becoming
obvious and blatant, globally
recognized to be compromised
after the grand tarnish suffered
in late 2008. The big three
constitute 90% of the ratings
market. The new formal launch
is scheduled for December or
January 2014, with its headquarters
to be in London.
The ARC website promised to devote
its output to the new multi-polar
world economy in direct competition
with US-centric agencies, designed
with a global cooperative approach
to credit ratings. Three of the
five companies involved are from
the BRICS bloc, notably SR Rating
from Brazil,
CARE Rating from India,
and GCR from South
Africa.
They are also bringing in CPR
from Portugal and
MARC from Malaysia.
The ARC rival is not alone in
its attempt to break the monopoly
of the ratings market. Rating
agencies from China, Russia,
and the United States officially launched a new credit
rating company Universal Credit
Rating in Hong
Kong last June as a challenge
the current industry leaders.
See the BRICS Post article (CLICK HERE),
and the RT News article concerning
the UCR reference from last May
(CLICK HERE).

## PRYING EYES & PROBING EARS

◄$$$ NOTES ON THE NSA DATABASE CONTINUE TO BE REVEALED. THEY INDICATED
STEALING TRADE SECRETS AGAINST
EUROPEAN COMPANIES, INCITING GREAT
ANGER. THE PHONY WAR ON TERROR
HAS MANY HIDDEN SIDES, NOT JUST
NARCOTICS PRODUCTION AND DISTRIBUTION
BY THE USGOVT AGENCIES. ACTION
TAKEN BY THE EUROPEAN UNION PARLIAMENT
SEEMS SHOCKING AND SEVERE. THEY
TOOK ACTION AGAINST THE UNITED
STATES ON SWIFT, DENYING THE US-BANKS
ACCESS TO THE SWIFT DATABASE (AWAITS
CONFIRMATION). $$$

Indications stack up on an unprecedented split with Europe, as the US isolation
increases. The European corporate
newswire outlets are full of stories
about anger expressed by European
leaders over the fact the widespread
NSA eavedropping and monitor activity.
Apparently, the espionage had been
focused upon stealing corporate
secrets. Once more, the rubric
of fighting terrorism is a false
front to permit tremendous criminal
activity under a massive smokescreen.
Ben Fulford reported a rather shocking
development. Resentment over USGovt
impropriety has reached such a
fever pitch, that a vote took place
in the European Union Parliament
recently to suspend the United States from the SWIFT international financial
database. He commented that such
action taken in the past were often
against nations like North
Korea and Myanmar,
rogue nations. If true, and the
Jackass awaits confirmation, then
the US is fast moving
into rogue nation status. BenF
notes that the major Western news
networks, calling them corporate
news companies, have blocked any
coverage of these stories.

Information is the currency of power, whether it is email messages to reveal
insider trading, monetary policy
to shine light on the path for
currency trading, new litigation
to drain banker reserves, new product
announcements, or whatever. Independent
German financial journalist Lars
Schall talked with former senior
NSA executive Thomas Drake. In
particular they discussed the Snowden
saga, the financial dimension of
the extensive NSA activities, informed
trading and banking, the technical
abilities at the disposal of intelligence
agencies, and the growing nature
of fascism. See the Metallwoche
video (CLICK HERE).

◄$$$ THS US-SUPREME COURT HAS BLOCKED A CHALLENGE TO NSA PHONE TRACKING.
THE COMPLAINT FILED BY A PIRACY
WATCHDOG GROUP WILL NOT BE HEARD
BY THE LOW
COURT (FORMERLY HIGH COURT). THE
FASCIST NATION PROCEEDS APACE.
MEANWHILE, THE EUROPEAN UNION HAS
DISPATCHED A NEGOTIATOR TO DISCUSS
THE EAVESDROPPING BY THE NSA IN EUROPE.
THEY ARE ANGRY AND HAVE BEGUN TO
ERECT POLITICAL FIREWALLS. THE
GLOBAL ISOLATION OF THE UNITED
STATES IS GAINING SPEED. $$$

The Supreme Court announced on November 18th that it would not hear at this
time a complaint filed months ago
that challenged the legality of
the National Security Agency's
nationwide telephone surveillance
program. The high court (once upon
a time it was a high court) issued
a notice without detailed comment
to acknowledge that it would not
proceed with the complaint introduced
this past June by a privacy watchdog
group. The case is a systemic response
to the NSA intelligence agency
activity on collecting metadata
pertaining to the phone calls of
millions of Verizon customers on
a regular basis. The watchdog
organization is Electronic Privacy Information Center
(EPIC) based in WashingtonDC. The
complaint formally petitioned the
Supreme Court to consider taking
action that would halt the collection
of phone records on a major scale.
In the recent few month, five separate
complaints have been filed to the
court, none of them heard. The
Constitution of the United States is
just a piece of paper after all,
shredded by George W Bush. It is
difficult to dispute the claim
of a fascist state, run by modern
day national socialists with a
penchant for high corporate crime
and war aggression.

When EPIC filed their petition in June, they wrote, "We believe that the
NSA's collection of domestic
communications contravenes
the First and Fourth Amendments
to the United States Constitution,
and violates several federal
privacy laws, including the
Privacy Act of 1974 and the
Foreign Intelligence Surveillance
Act of 1978 as amended.
We ask the NSA to immediately
suspend collection of solely
domestic communications pending
the competition of a public
rulemaking as required by law.
We intend to renew our request
each week until we receive
your response." The
formerly high court, now just
a rubber stamp for the fascist
state, has responded with a
measure of stone silence. At
the time the decision was rendered,
EPIC made a final comment on
how the secret surveillance
program has been disclosed,
how Congressional leaders and
legal scholars agree it is
unlawful. They wanted to give
a chance for the Supreme Court
to weigh in. They did. See
the Russia Today article (CLICK HERE)
and notice that the US-based
news networks are strangely
silent also on the story. Look
for the EPIC executives to
have tax audits in the near
future.

Viviane Reding has been dispatched as commissioner for
critical NSA talks with the USDept
Justice. She will meet with the outlaw Eric
Holder, who occupies the USGovt
Attorney General post. Reding
is regarded as a very tough serious
formidable negotiator, and comes
from Luxembourg.
The talks begin on November 25th
to discuss the consequences of
the National Security Agency
spying scandal. Her decisive
attempts to ensure that Europeans
enjoy the same rights to data
protection as US citizens have not been well received. Some
misperception and baffling ignorance
is at work. A high ranking USGovt
working on the trans-Atlantic
talks stated that, "If
Reding wants to continue keeping
big US companies away from Europe,
then she should not be surprised
if Europe is soon as isolated
as North Korea." Quite
the delusional viewpoint. Reding
has firm resolve. She is on record
stating, "Data protection
is a fundamental right in Europe.
Fundamental rights are non-negotiable,
period. The American government
must guarantee the legal protection
of EU citizens in the US. I want clarity. The European Parliament will
never vote in favor of an agreement
that does not clear up this point." The
opposite reaction is almost a
guaranteed outcome. The United States is to be isolated, not Europe. The Europeans are forging much stronger ties with Russia, China, and the Eastern Hemisphere,
working toward a Eurasian Trade
Zone. The US will be outside,
looking in. The US ideals go counter to anything remotely resembling
a trade zone, or a free trade
zone. The US will be the isolated nation, the perceived
rogue nation, the derelict nation
set adrift on its Weimar craft. See the Spiegel article (CLICK HERE).

◄$$$ AUSTRALIAN SECURITY AGENCIES SPIED ON JAPANESE COMPANIES TO HELP
ITS INDUSTRIES NEGOTIATE TRADE
DEALS. THE ANGLO ROOTED EAVESDROPPING
ACTIVITY IS WIDESPREAD ACROSS THE
WORLD. $$$

Global surveillance, spying, and snooping with bugs and wire taps have been
conducted by the NSA (USGovt) and
the GCHQ (British Govt) for a long
time, becoming well known. However,
add Australian security agencies
to the fascist mix. Once again,
their activity pertained little
if any to fighting terrorism, as
a recent EFF article made plain.
The massive surveillance programs
are not done to protect people
from extreme threats. The recent
revelation details how commercial
espionage was also being conducted
by Australian officers against
Japanese corporate targets. Apparently,
the corporate espionage is more
than in Brazil. The Sydney Morning Herald has divulged
information about extensive industrial
spying on Japanese companies carried
out by Australian secret services.
The world's largest mining company
BHP Billton was among the companies
aided by Australian security agencies
during delicate negotiated deals
with Japan. The information comes from a former Australian
Secret Intelligence Service officer.
A former diplomat has also confirmed
Australian intelligence agencies
have long targeted Japanese companies.
The Australian companies benefited
from the intelligence operations
while in contract talks. Professor
Gregory Clark wrote, "In
Australia, favored firms getting
spy material on Japanese contract
policies and other business negotiations
used to joke how [it had] fallen
off the back of a truck." See
the Tech Dirt article (CLICK HERE)

## GEOPOLITICAL GROTESQUE GEMS

◄$$$ THE AMERICAN MARCH TO GLOBALISM HAS BEEN HIDDEN. $$$

The Jackass chooses to step aside from in-depth reporting of the geopolitical
and sinister events. However, they
are becoming front page news, without
much recognition of their dastardly
side. The main elements will be
touched upon, as more research
and investigation is the option
on the reader's end. Some climax
events are in progress. Patrick
Buchanan has a realistic viewpoint.
He stated, "[On America's
conversion to Globalism], from
1989 to 1993, the Bush I Admin
ran $360 billion in trade deficits
in goods, a US record.
Bill Clinton, who enlisted the
Republican establishment to help
ratify NAFTA and US membership
in a World Trade Organization,
where the United States has the
same vote as Armenia, ran $1.8
trillion in trade deficits. Clinton's
deficits were then dwarfed by George
W Bush's, who ran up $5.3 trillion
in trade deficits in goods. In
four years and eight months, Obama
has piled up trade deficits totaling
more than $3 trillion. Thus
during 25 years of free trade globalism,
the United States has run up well
over $10 trillion, or ten thousand
billion dollars in trade deficits
in goods. And what do we
have to show for it? Our economic
independence is history. We rely
on foreigners for the necessities
of life. We are the greatest debtor
nation in history. Beijing
and Tokyo banks score with $billions in annual interest payments on the
USTBills and USTreasury Bonds they
hold. As the gleaming cities of
Asia rise, America's
infrastructure visibly crumbles.
The real wages of our working men
and women have not risen in decades.
In the first decade of this century,
we lost 6 million manufacturing
jobs as 55,000 factories disappeared." Observe
the betrayal of the United
States by
its political and corporate leaders
over three decades. Globalism is
the visible banner for global fascism,
whose objective is to destroy the United States, since the cradle of capitalism
and the beacon of freedom. No more!!

◄$$$ RUSSIA IS EXPANDING ITS MILITARY PRESENCE IN THE
MIDDLE EAST WITH A GROWING FOOTHOLD
IN THE MEDITERRANEAN.
THEIR HEAVYWEIGHT PRESENCE WILL
ALTER THE REGIONAL BALANCE QUICKLY.
THE TEAM KREMLIN WILL WIN TWO NAVAL
PORTS AS PRIZES. THE EFFECT ON
THE PETRO-DOLLAR WILL BE SUDDEN
AND SOON. THE TEAM OBAMA WILL RACK
UP MORE SIGNIFICANT LOSSES, LIKE
THE PETRO-DOLLAR THRONE. $$$

The chess match between Putin of Team Kremlin and Kerry of Team Obama seems
like a mismatch. The board is the Middle East on the Mediterranean side of the room. After a visit
to both Egypt and Saudi Arabia, the Secy State Kerry made no formal comment.
One can only believe the meetings
went badly, and the US mission
was rejected.Russia is
being welcomed back to Egypt after
50 years. The artful maneuver by
Putin (the Man from Vlad) who defused
tensions in Syria is
being widely praised. The Nobel
Peace Prize winner Obama is the
object of scorn and ridicule. The
Russian prizes are two naval bases
soon to be built, in Lebanon and
in Jordan. The deception by
the USGovt is being widely recognized,
such as the Saudi usage of chemical
weapons (sarin) near Damascus,
and having the US press
accuse Syria of culpability. The
weapons were purchased by the Saudis
from a British firm. The US is acting like squirrels
in Team Obama, looking like amateurs.
The Team Kremlin could look like
puffed roosters, but they proceed
step by step to quietly capture
the leadership role in the Middle
East. The diplomatic winds are
changing. The US has for two generations been at the front
and center of every business, military,
or diplomatic meeting of any sort.
That has changed, and radically
so.

Egypt and Russia will enhance military
cooperation. They will continue,
and thus replace the USMilitary
as a fixed piece on the board.
Aid will come from the Saudis,
no longer in volume from the Americans
and British. The press prefers
to point out the hundreds of protesters
who died during the overthrow of
the US puppet Mohamed Morsi. However,
thousands died of starvation due
to the Morsi government's incompetence,
and from the USFed monetary policy
which lifted food prices. Thus
the coup d'etat and installation
of General Sisi in Cairo. The US is seen more often as a rogue nation. See
the Debka article (CLICK HERE),
the Rediff article (CLICK HERE),
the Washington Post article (CLICK HERE),
and the XinhuaNet article (CLICK HERE).
On an increasing basis, one must
locate news from non-US sources
for completion and accuracy.

◄$$$ FURTHER OUTRAGE AMONG ASIAN NATIONS HAS COME, AFTER LEAKED INFORMATION
REVEALED PIRACY CRIMINALIZATION.
THE TRANS-PACIFIC PARTNERSHIP TREATY
WAS COMPROMISED AND UNDERMINED.
IT IS BEING SEEN AS A CORPORATE
ELITE GLOBAL SLAM. RESISTANCE WILL
CONTINUE. $$$

A serious Wikileaks revelation has hit. The issue is over the intellectual
property rights chapter of the
Trans-Pacific Partnership trade
agreement. The party most angered
is the Australians, who could face
new draconian measures if caught
infringing on copyrights online. Comments
were made off the record, but the
treaty document was leaked in draft
form. As more of the TPP Treaty
becomes known, the parties are
shirking and retreating. Reactions
are being described as chilling.
The agenda behind this queer TPP
trade movement is slowly being
revealed. The corporations of the
West wish to maintain control over
intellectual property, whether
it be technology patents, bio-engineering
methods, military weapons, or food
genetics. It is no longer about
books, music, software, and chip
design.

The Pirate Party Australia issued its own furious statement on the hidden TPP
agenda. They wrote, "This
corporate wishlist masquerading
as a trade agreement is bad for
access to knowledge, access to
medicine, and access to innovation.
It is absolutely appalling that
we are still relying on leaked
texts to determine just what we
are getting ourselves into with
these trade agreements. Even Parliament
is being kept in the dark. It
is time to release the text, and
all future texts, so that transparency
and oversight can result in texts
that help, not hinder, legitimate
Australian interests. There is
no economic justification for the
Trans-Pacific Partnership Agreement's
intellectual property provisions. DFAT
must immediately hold public briefings
to explain their now public negotiating
positions. It is time for some
accountability." The TPP
is a bold clandestine attempt by
the USGovt to maintain a corporate
elite order. Prime Minister Tony
Abbott is seen as a limpwristed
tool, claiming all parties will
be better off. Check his private
bank accounts for a hint of the
direction and influence. See the
Delimiter article (CLICK HERE).

The battleground is extending to Japan. The Land
of the Rising Sun, under extreme
competitive pressures from ancient
rival China,
might be turning on its Western
masters. They are being exposed
as using industrial espionage on
an increasing basis. It is part
of the sophisticated information
espionage wars. The lesson is clear,
that in response to Anglo subterfuge,
the world will engage in counter
attack. See the Giza Death Star
article (CLICK HERE).

◄$$$ WEATHER WARS FOCUS ON THE PHILIPPINES.
VENGEANCE IS UGLY, PART OF AGENDA-21.
A DUTCH WEATHER CHASER HAS DOCUMENTED
THE CREATION OF THE HURRICANE (CYCLONE).
$$$

Permit the Jackass to be candid. Those people who dismiss the HAARP weapon
as fantasy and futuristic mumbo
jumbo are ignorant at best, and
morons at worst. It is real. People
without scientific background should
shut the hell up, and pay attention
to those who have such valued background,
often from hard work during the
university years. My experience
has benefited from direct contact
with two people who actually personally
know engineers from the longstanding
HAARP project. The events behind
the Phillipine hurricane are full
of intrigue. Within a couple
weeks after the USGovt was criticized
for failing to attend a crucial
Pan-Asian conference in the Philippines,
where the theme of the gathering
was cooperative economic efforts
across Asia, and even work to produce
a common regional currency, the
island nation was hit by a hurricane. Despite
over one million USMilitary personnel
stationed within a few hours of
the Philippines, not a single vessel or air shipment
has been deployed to help its ally
in a critical time of need. The US treats
the Philippines like a colony,
running it as a mercantile economy,
accessing cheap labor, exploiting
natural resources, and for 50 years
using the nation as a naval base.
Behold yet another crazy weather
anomaly that liquidated 10,000
people in a single stroke. The
credible theory put forth is that
Typhoon Yolanda was artificially
created using a weather weapon. The
HAARP device uses microwaves, which
can be detected. They are not naturally
occurring in the atmosphere. Such
waves detected are a tell-tale
signal of manmade mayhem.

Microwave pulses gave birth to Typhoon Haiyan (Yolanda). The engineers must
be proud of their work. The world's
strongest storm in recorded history,
Typhoon Yolanda, with sustained
winds slammed the island nation
with winds reaching 195 mph, with
gusts up to 235 mph. The massive
storm originally began its rotation
born out of a manmade microwave
anomaly in the West Pacific. This
video discusses the findings, and
possible origin of the microwave
pulse. The suspicion and evidence
point to the USAirForce base near
the location, the base a satellite
communications hub. See the YouTube
video (CLICK HERE).
A friend told me how a casual observer
can notice the abnormal unnatural
weather on a televised weather
program. Look for striations (lines
in parallel) from the Doppler Graph.
It is clear in many cases. Mother
Nature does not produce lines in
such an orderly way. Manmade equipment
does.

The Dutch just did an amazing update. They tracked the storm development, even
identified its characteristics
which fall outside the normal natural
scope. They identified another
storm as generated and confirmed.
The Philippines was
hit a second time. See the Since
Dutch WordPress ongong weblog for
information (CLICK HERE)
and the YouTube video (CLICK HERE).
As footnote, a hurricane appears
in the northern hemisphere, but
a cyclone in the southern hemisphere.
They differ in rotation clockwise
versus counter-clockwise.

The president of the Philippines was pivoting
away from the Trans-Pacific Partnership
(TPP) for a simple reason. President
Obama did not show up for the Asian
economic conference, the reason
given as the USGovt shutdown. Thin
excuse, empty chair as leader. Besides,
the Philippines concluded
that the United
States was
not the right partner. The nation
had been instead looking seriously
at pivoting to the ASEAN version
in the Chinese sphere of influence.
A week or so later, the biggest
and most powerful typhoon in recorded
history headed directly toward
the Philippines. Such
events do not occur naturally or
with such excellent timing. So
HAARP the herald angel sings glory
to the new born king, or rather
vengeance to any nation that betrays
the King Dollar. A video below
showing the HAARP stations and
the microwave methods is detailed
for all to see. That is, all who
have an interest in learning about
a major global weather weapon,
capable of producing a hurricane
when directed upward to the atmosphere,
and producing an earthquake when
directed downward to the earth's
crust.

The intrepid 21st Century Wire has gone boldly public. A prolific weather watcher
known as Dutchsinse has linked
the latest storm formations in
the Philippines to man-made microwave pulses using
HAARP technology. He detailed its
usage to show how Typhoon Yolanda
was created. In recent years, weather
modification has been forced into
the spotlight by many independent
investigators as well those from
scientific fields, including admissions
by prominent figures. One such
scientist who has acknowledged
that this technology exists is
theoretical physicist Michio Kaku,
an American theoretical physicist,
the Henry Semat Professor of Theoretical
Physics at the City College of
New York. See the 21st Century
Wire video (CLICK HERE).

Berlin has suspended the purchase of armed
drones on the basis that such weapons
kill civilians. More specifically,
as they stated, the German Govt
categorically rejects illegal killings.
This follows a report by Amnesty
International that accused Merkel's
government of aiding the USGovt
with drone strikes in Pakistan. Despite
opposition, the Germans had made
several official purchases valued
at hundreds of million Euros of
drone weaponry from the USMilitary
defense contractors. The purchases
will cease. In recent months, Berlin
officials had criticized the USGovt
for usage of remote controlled
aircraft to carry out strikes,
often in Pakistan,
which have killed thousands of
civilians. The USGovt defends their
usage, claiming they save US soldier
lives. The race is on to produce
advanced defense systems using
bat drones to jam radar equipment. Russia and
the US are
in competition. See the Russia
Today article (CLICK HERE and HERE).

◄$$$ SOMETHING BIG GOING DOWN IN GENEVA
EARLY IN NOVEMBER, BUT IT STALLED.
THE IRAN NUCLEAR TALKS MADE PROGRESS, BUT SUDDENLY
WERE STALLED AT A BIG IMPASSE.
BLAME THE FRENCH. $$$

Kerry and Lavrov met in Geneva. The state ministers from the United
States and Russia made
progress. The detente between
the United
States and Iran is desired universally, but to forge a pact,
numerous thorny issues had to
be settled. The Jackass preferred
to call it a conference to agree
on which nations would nuke which
other nations if they got out
of line. See the PressTV articles
(CLICK HERE and HERE). At
risk is the Petro-Dollar strangely,
since the USGovt has produced
such great tensions with Iran,
that the Eastern
Alliance of nations has rushed
to develop and soon implement
a USDollar alternative to trade. Their
efforts were hatched from Iran sanction
workarounds, like avoiding SWIFT
bank obstacles, and furthering
gold exchange to settle bilateral
net trade balances. The usage
of gold is frowned upon the USGovt
global dictatorship regime. Too
much progress has been made on
the Gold Trade Settlement. Thus
the motivation by the USGovt
to hastily work toward resolving
issues with Iran. The
ruse is that Iran possesses
nuclear weapons. The reality
is that Iran is the principal nation settling oil & gas
trade outside the USDollar. Thus
the Anglo nations, their leaders,
and their subservient press networks
label the Iranians as rogue nation.
The talks could have been called
the Iran Dollar Talks with a
nuclear diversion.

The Iran Nuclear talks failed due to a block in progress by French. Some argue
that a new Saudi-French alliance
is emerging. Few expected a quickly
forged pact. But fewer expected
the reason for the impasse to be
French obstruction and intransigence. US delegate John Kerry had
been urging for the Iranian deal
for weeks. So when news hit that
it was France that
scuttled a deal with a last minute
block, many were surprised. More
specifically, it was France, Saudi
Arabia, and Japan that formed the final
block to a pact being signed. See
the Zero Hedge article (CLICK HERE).

The grand losers will ultimately be the French and Saudis together. While Paris
leaders try to make a difference,
they do not realize that they are
dead men walking, the Saudis included.
More accurately, dead nations.
EuroRaj made an intesting comment
as footnote. He wrote, "The
French have been selling out to
the Arabs for a long time. Look
at who owns their football (soccer)
clubs. That is the visible nature
of the transfer of ownership and
prestige. Their companies, their
property are all being sold. This
is desperation on the part of France.
This is their Elite cutting side
deals into the end game. They
are being penny wise and pound
foolish, but that is what one does
when left with bad choices. What
is a bigger market for French goods, Saudi
Arabia or Russia or China?
Witness the last ditch defense." The
Jackass harbors no animosity to
the French people, some friends
included, even one visiting national
to dine with in San Jose Costa
Rica on a couple of occasions.
However, the French appear to overplay
their hand, hardly the global leader
in diplomacy. They settle no major
bipartisan disputes, including
in Lebanon. Their leaders are often CIA tools like
Sarkozy. Their security agency
is a mere outpost for Langley. They seem a spent nation with arrogant
leaders that adopted socialism
in the midst of failure, not capitalism.
They seem to act like hand servants
to the Americans. When not kowtowing
to the Americans, they act as squires
to the Germans, who own over 90%
of their sovereign debt.

## USTREASURYS REACH BREAK POINT

◄$$$ THE USGOVT DEBT HAS GONE OUT OF CONTROL (LEGAL LIMIT LIFTED). OUT
OF THE GATE FOR FY2014, ANOTHER
$1 TRILLION HAS BEEN ADDED TO THE
DEBT BURDEN. THE USDOLLAR IS BEHAVING
LIKE A THIRD WORLD CURRENCY ON
FUNDAMENTALS AND MANAGEMENT. THE
DOLLAR RESERVE EQUILIBRIUM IS BREAKING
DOWN. THE DYNAMICS ARE PUSHING
FOREIGN NATIONS TO ADOPT THE GOLD
STANDARD. $$$

Just in time to greet the first tranche of new debt, the USCongress lifted
the legal limit requirements on
USGovt debt. It will simply be
ignored, since a formality and
nuisance. An extremely large red
flag. The USTreasury has issued
a hefty $1 trillion in new debt
in the first 6 weeks of Fiscal
Year 2014. This is standard and
customary, very expected. The first
few weeks of a new fiscal year
are always outsized on debt. In
July and August, the budget managers
put off certain expenses until
the new FY to make the last FY
look better, or not so terrible.
There is more to the factor. Many
different trusts were raided when
the debt limit was obstructing
the business of running the government.
With the shutdown out of the way,
the limit pushed aside, the trusts
are being replenished, the funds
put back. Watch for new extraordinary
measures by the new Treasury Secy
Jacob Lew, since no limit must
be kept in mind, no budget caps,
no imposed ceiling. Expect $19
trillion in total USGovt debt by
the end FY2014. Global bond
investors are watching, and their
reaction will be to diversify out
of USTBonds, to sell them, and
to appeal behind closed doors to
the USFed for quiet redemption
that does not disrupt the USTreasury
Bond market. The temporarily
broken REPO market gave the players
an opportunity to test the quiet
back office mechanisms. Silly analysts
state that the pace is for $9 trillion
for the current year annualized,
when the better method would be
to compare with last year for the
initial couple months. It is always
the same pattern, the biggest debt
months after Labor Day when the
new fiscal year kicks in. See the
12160 News Info article (CLICK HERE).

The USGovt debt is totally out of control, spending not reined in, war costs
persistent, the welfare state expansive,
support for food and disabled workers
huge, Social Security gone into
the red, and pensions bloated. The
debt buildup will continue until
the system implodes. It is imploding
here now. In no way can any
equilibrium be maintained. The
debt is way out of balance with
what a market can provide in demand
to fund the bonds. The debt has
grown during decades of structural
economic development for the United
States, along
with the Cold War with the Soviet
Union, and a decade of staggering
costs in the Iraq War and Afghan
War. To put it back in balance,
the USEconomy must be restructured
more toward exports, a very costly
and time consuming process. For
foreign nations, they have begun
to realize that accumulating more
US$-based reserves makes no sense,
and even adds to their risk of
instability. The Gold Standard
will return, since it is in the
best interest of all nations, except
for the US nation. Departure from a gold standard is
a relatively new and unique situation
since 1971/1973, a recent aberration.
Therefore the biggest shock will
come to the United States. The guest
does not claim the Jackass conclusion,
but he paints a picture of the US entering
the Third World. See the Matterhorn interview of John
Butler by Lars Schall (CLICK HERE).

◄$$$ THE US-HOUSE OF REPRESENTATIVES VOTED TO PROVIDE BANKSTERS FULL LIBERTY AGAIN IN THE DERIVATIVES BUSINESS. THE REQUIREMENT FOR MAINTAINING
COLLATERAL ON THEIR HIGH RISK DERVATIVES
WILL BE WAIVED. THE BIG US-BANKS
CAN DECLARE VALUE ON THEIR ASSETS,
CAN DELVE DEEPER INTO DERIVATIVES,
AND CAN AVOID SETTING ASIDE COLLATERAL.
THE SYSTEM IS TRULY DEAD, WITH
BIGGER UGLIER ZOMBIES WANDERING ON WALL STREET DEFENDING AMERICA FROM FICTIONAL PREDATION.
$$$

In late October, the US House passed a reportedly minor (but highly significant)
reform to the Dodd-Frank Financial
Regulatory Bill. It was cited as
a necessary reform to the major
sweeping reform passed three years
ago, after the banksters wrecked
the financial system in 2008. Official
called HR 992, the Swaps Regulatory
Improvement Act was authored primarily
by Citibank lobbyists, and will
allow predatory Wall Street financial
institutions to once again engage
in high-risk derivatives trading. It
legitimizes what they already do,
as they break the law. The requirement
for collateral against positions
will be waived. Losses will be
socialized, paid for by the American
taxpayer through the FDIC. It is
absurdly under-funded and thus
useless. The New York Times commented, "Citigroup's
recommendations were reflected
in more than 70 lines of the House
committee's 85-line bill. Two crucial
paragraphs, prepared by Citigroup
in conjunction with other Wall
Street banks, were copied nearly
word for word." The other
Co-sponsors of the bill are on
the virtual Citibank payroll. These
Congressional members received
nearly 17 times more money from
the big New York bank than have
other members of the House who
have not signed on as co-sponsors,
according to Forbes. The total
Citigroup contributions to buy
the financial policy is logged
at $503,150 to current members
of the House of Representatives,
a band of harlots. The biggest
recipient is Jim Himes (D-Conn)
who has received $66,450 from Citigroup,
a co-sponsor of the bill. The spin
spouted to the American public
is that the tweak to the FinReg
Bill will fix the USEconomy.

The House Financial Services Committee chairman referred to the slow weak non-recovery
recovery, like a bonafide moron
and banker tool fool. He did not
comment on any spurious benefits
from the FDIC backstop to derivative
losses. It sounds like the USCongress
is sabotaging the USGovt finances.
Just like with the FASB relaxed
rules on accounting, the Wall Street
banks will be left to their own
judgment to declare new 'unusual
or exigent circumstances' for bypassing
the designed restrictions imposed
by the original Frank-Dodd Bill,
flawed though it was. It did place
some gutsy restriction on the criminal
big money center banks. To be
sure, the USCongress is a wholly
owned subsidiary of the bankers
and the global elite. The so-called
Dodd–Frank Wall Street Reform & Consumer
Protection Act signed into law
by Obama in 2010 was largely devised
as a propaganda device to placate
Americans outraged by the Too Big
to Fail bail-out mantra, complete
with swindles. The FinReg Bill
has been largely ignored, awaiting
some reform to make official its
irrelevance and ignored status. As
of June, 175 of 279 separate Dodd-Frank
deadline provisions have been missed.
Government regulators have neglected
70.1% of rulemaking deadlines and
99.6% of 280 rules with specified
deadlines, according to Bank
Credit News which monitors progress
or lack of it. The FinReg Bill
was a sham from the start, written
by Wall Street lobbyists, weakened
as it was sidestepped, begun to
placate the incredibly ignorant
public. See the Info Wars article
(CLICK HERE).

Some final interpretation can be made. First the Financial Accounting Standards
Board relaxed rules in April 2009,
to enable the big banks to declare
any value they wished for portfolio
assets. A total sham has permitted
dead banks to act like zombies,
hardly lending armatures and certaintly
not investment machines. Then the
FinReg Bill was scribed so as to
pull the big US banks
all back in line. They have been
operating as insolvent structures
for four full years, deader than
Jimmy Hoffa. Now in November 2013,
the FinReg Bill is officially relaxed
on both rules for derivative involvement,
and the setup for derivative collateral. Translation: THE
BIG US BANKS
ARE DEAD AGAIN, NOW DEADER. Why
else make such sudden new provisions?
The firm Jackass belief is that
the strong move from 1.65% in May
to 2.95% in September on the 10-year
USTBond killed their derivatives,
heaping gigantic losses. They can
continue to sit in the casinos
and to play some, but their accounts
are drained from deep derivative
losses. They are probably being
replenished by the USFed on a weekly
basis, from up to $200 billion
per month in largesse off the Weimar
printing press with no accountability
and no limits.

◄$$$ A NEW MORTGAGE LOAN THREAT IS COMING VERY SOON, AFTER A 10-YEAR
RESTRAINT PERIOD ENDS ON TERMS.
PAYMENT HIKES TOWARD PRINCIPAL
WILL KICK IN SOON, FORCING ANOTHER
BIG WAVE OF FORECLOSURES. THE US-HOUSING
MARKET IS STUCK IN A TERMINAL DECLINE
AND FAILURE. THE BIG US-BANKS SEE
THE UPCOMING LOSSES, AS DO THE
DEBT RATING AGENCIES. THE USFED
MIGHT RECEIVE A NEW APPEAL FOR
A RELIEF PARCEL IN QE4. $$$

Home equity lines due for reset on payment terms present a looming financial
disaster, yet another one. Many
borrowers might no longer be able
to afford second mortgages and
credit lines, when the payment
resets require that they begin
paying both principal and interest
on their balances. A new storm
front has been identified, soon
to be denied. At risk is $billions
of home equity credit lines that
were extended a decade ago during
the housing boom, assuring a new
wave of defaults for banks and
homeowners. The details are simple.
The loans work as credit lines,
technically second mortgages with
floating rates and flexible withdrawal
terms, but they carry mandatory
resets after ten years. The resets
require borrowers to begin paying
both principal and interest on
their balances, not just the floated
interest during the initial 10-year
draw period. The impact seen
on the monthly payment is around
$300 to $400 in most cases for
homeowners, but up to $600 for
a significant slice. If borrowers
cannot afford or choose not to
make the fully amortizing payments
that reduce the principal debt,
the bank that owns the note can
demand full payment and foreclose
on the house. The merry-go-round
continues to spin on defaults.

Next consider the volume involved. According to federal financial regulators,
about $30 billion in home equity
lines dating to 2004 are due
for resets in year 2014, $53
billion in year 2015, and a staggering
$111 billion in 2018. The
looming wave of disaster, as
Equifax describes it, will find
the majority of borrowers unable
to manage the higher payments.
The banks will be forced to foreclose,
refinance, or modify their loans. The
refinance doorway will be blocked
since the homeowners will not
qualify under the more stringent
rules. Loan rates might even
rise, even a small jump making
the difference to unapproved
refinances. Equifax reminds that
owners with high balances in
their credit lines already have
low credit scores, and elevated
statistical risk of default after
the reset. The phenomenon is
not coming to the banks as a
blind side. In October, Citigroup
increased reserves on its nearly
$20 billion in home equity lines,
citing a major challenge ahead.
The risk is highlighted by Fitch
Rating agency for 2014, citing
the backlash of easy terms years
ago to produce many more defaults.
See the LA Times article (CLICK HERE).
Open the USFed doors to another
parcel for QE4 support, one hard
to refuse since urgent.

◄$$$ MUNICIPAL BONDS REPRESENT YET ANOTHER THREAT. THE USFED MIGHT RECEIVE
A NEW APPEAL FOR A RELIEF PARCEL
IN QE4. $$$

The wave of municipal bankruptcies cannot be avoided. Meredith Whitney cited
the risk almost three years ago,
dismissed. Yet the threat never
went away, and has begun to appear
in force as new floodgates have
opened. See the Testosterone Pit
article (CLICK HERE).
The entire Muni Bond market has
turned into a toxic bond swamp.
Fitch downgraded the Chicago
city bonds. Moodys warned of bankruptcy
for Scranton Pennsylvania. See the Yahoo Finance
article (CLICK HERE)
and the Watchdog Org article (CLICK HERE). Puerto
Rico cannot escape the news. Despite
the financial networks portraying
the island protectorate nation
(US colony) as attractive
from new lax legal angles, like
with property tax changes, it is
in deep trouble. The Puerto
Rico debt is not manageable, likely
to fail unless something extraordinary
happens in the bond market. See
the Business Insider article (CLICK HERE).
Open the USFed doors to another
parcel for QE4 support, one hard
to refuse since urgent.

◄$$$ STUDENT LOANS ARE THE NEXT FOCAL POINT OF IMMEDIATE FAILURE, WITH
HUGE VOLUME AND POOR UNDERWRITING.
YET ANOTHER SUBPRIME PLANK HAS
BEEN SPOTTED IN THE ROTTEN CREDIT
PORTFOLIO. JPMORGUEN HAS JOINED
HSBC IN EXITING THE STUDENT LOAN
BUSINESS. THE USFED MIGHT RECEIVE
A NEW APPEAL FOR A RELIEF PARCEL
IN QE4, HARDER TO REFUSE SINCE
THE USGOVT IS THE MAIN UNDERWRITER.
$$$

The student loan bubble is starting to burst. The largest bank in the United States will stop making student loans. JPMorgan
Chase had sent a memorandum to
colleges notifying them that
the bank will stop making new
student loans in October. The
reason stated officially is pure
nonsense misdirection, the usual
Wall Street fare. JPMorgue actually
said they do not see significant
growth potential in such loans
as an ongoing business. The move
is reminiscent of the subprime
shutdown that happened six years
ago, which triggered the global
financial crisis, nowhere near
ended. With over $1 trillion
in outstanding student loans,
it stands as the second largest
source of household debt after
mortgages. Only around $150
billion of the total amount is
from private student loans made
by banks and other financial
institutions, leaving over 80%
with the USGovt as the inept
underwriter. The niche has made
bubblicious growth spurts. Just
10 years ago, student loans stood
at $240 billion. So they have
grown four-fold.

A report issued by the Consumer Finance Protection Bureau last year indicated
a small number of student loans
were currently in default status.
Two major threats are presented. Defaults
will rise if interest rates go
higher, either from the USFed
withdrawing its QE bond support,
or from foreign abandonment of
USTreasurys generally. Unlike federal
loans, student loans are variable
rate loans linked to LIBOR or the
prime rate. Also, defaults will
rise since the USEconomy is stuck
in a terminal recession, better
described as a hidden depression
which cannot be properly identified
for political reasons. With few
job opportunities given to graduates
who must make loan payments, defaults
will rise very rapidly. JPMorgan
is the second big private lender
to step away from the business.
Last year US Bancorp exited the
business. That leaves Wells Fargo,
Discover Financial Services, PNC
Financial Services, SunTrust, and
various credit unions as the largest
private student lenders. Lest one
forget, the former USGovt slush
fun Sallie Mae is another student
lender, which was privatized in
2004. See the CNBC article (CLICK HERE)
or Zero Hedge article (CLICK HERE).

Jim Rickards put some detailed color on this next subprime crisis. He called
it a crisis in the making, due
to the size of the debt and the
poor quality underwriting. The
USDept Education calculated the
default rate on federal student
loans rose to 14.7% from 13.4%
the year before, the highest level
since 1995. Rickards forecasts
a few $100 billion in losses from
student loans in the near future,
with a twist. Their accounting
is off budget currently. They will
very soon be part of the budget
calculus, and add a significant
slice to the USGovt deficit, perhaps
equal to other major deficit components. Others
are debt service interest, SS/Medicare,
Defense.The USGovt has
openly stated its priority to grant
student loans as part of a pump
prime for the USEconomy generally.
They support the colleges and universities.
They support a class of consumer
that does not save, pure spending.
Students in Rickard's opinion are
a virtual ATM machine who spend
immediately, frequently for beer
as he quipped. See the Yahoo Finance
interview (CLICK HERE).
Open the USFed doors to another
parcel for QE4 support, one hard
to refuse since urgent.

◄$$$ HARVARD SWAP TOLL TOPS $1.25 BILLION IN LOSSES AS AGREEMENTS ARE
EXITED. THE INTEREST RATE DERIVATIVE
LOSSES ARE MOUNTING. LARRY SUMMERS
IS A NOTABLE MAJOR WRECKING BALL,
A LOSER ON ALL COUNTS. ALSO, PIMCO
SUFFERS FROM SIZEABLE BOND EXITS,
AS CLIENTS WITHDRAWAL DURING AND
FOLLOWING THE TAPER TALK USTBOND
LOSSES. $$$

HarvardUniversity is the world's richest educational institution. In
recent years, it is debated whether
it functions a casino, a criminal
incubator, or a set of colleges. Last
year, it lost $345.3 million as
it officially terminated Interest
Rate Swaps contracts, bringing
its cost of unwinding debt derivatives
since 2008 to more than $1.25 billion. Harvard
made the most recent payments to
exit derivatives linked to almost
$1 billion in certain debt instruments.
The data was disclosed in a report
on the fiscal year ended June 30th.
A major wrecking ball in the financial
derivatives doled out damage to
the venerable institution's once
staggering endowment fund. The
fund was on pace to lose more than
a quarter of its value, mostly
under the watchful eye of Larry
Summers, the arrogant problem child
from Wall Street. Since then,
the school has raised cash and
cut debt to stabilize its finances.
The university endowment is currently
worth almost $33 billion. One could
with confidence say that Larry
Summers enriched Goldman Sachs,
while at the same time he screwed
Harvard. See the Bloomberg article
(CLICK HERE).

Let the record know that Harvard Univ was the laboratory that fabricated the
Enron Ponzi Scheme. They laid out
the schematics for the Enron game.
Citigroup provided the Enron investment
capital. JPMorgan designed the
slushy secretive off-shore companies,
calling them Special Purpose Entitites,
otherwise known as shells for the
sham. Harvard's Fund enjoyed profits
on the way up, then was tipped
off that the jig was up, the fraud
exposed, the game over. So Harvard
shorted Enron, and profited on
the way down as well. They escaped
all blame, as they benefited from
the Wall Street blame pinned on
Arthur Anderson amidst a grand
hubbub. AA was hardly clean, but
they had partners in Citi, JPM,
and Harvard. So the recent derivative
losses could not have happened
to a more scummy rancid crew than
the Harvard Crimson. In the wake
of the Enron scandal, the ranking
executive of the Endowment Fund
escaped to PIMCO. The link is Mohammed
El-Erian, currently co-CEO of PIMCO
with Bill Gross. The Jackass
opinion of PIMCO was tainted when
El-Erian did the migration. Gross
benefited from insider USTreasury
Bond information, until Goldman
Sachs left them out of the derivative
generated bond rally in late 2010. PIMCO
was short on USTBonds, and lost
big money. So in the ugliness,
Harvard lost several $billion also.
Consider it a little blowback from
the criminal Enron profits they
reaped. In the latest quarter,
hard times befall PIMCO still,
as the big funds have suffered
a hefty $39 billion in client withdrawals.
The Taper Talk slammed the bond
funds, causing losses. Gross is
not a big derivative player, and
never talks about them. The losses
were seen on bond principal. Once
again, PIMCO needs some insider
information like Wall Street firms.
See the Bloomberg article (CLICK HERE).

◄$$$ FRENCH GOVT DEBT WAS DOWNGRADED BY STANDARD & POORS, GIVING
SMALL LIFT TO THE BROKEN USDOLLAR.
BLAME IS GIVEN TO THE LUNATIC AUSTERITY
MEASURES, IN BUDGET CUTBACKS. PRESIDENT
HOLLANDE HAS HALTED ALL REFORMS,
AS THE SINKING VESSEL IS OBSERVED
IN HORROR. EXPECT BIG FRENCH BANKS
TO BE DOWNGRADED SOON. SPAIN AND ITALY ARE
EACH IN WORSE CONDITION. FRANCE FACES
A STRANGLE FROM PUBLIC PROTESTS.
$$$

Hollande is paying the price for kowtowing to demands made by the EuroZone
bank czars for austerity in the
French national budget. Hollande
was told by French economists,
including the prestigious Observatoire,
that austerity cuts would lead
to depression and deflation, which
has indeed occurred. The Standard & Poors
downgrade of France to AA (from AA+) is an indictment of Europe's entire contraction regime, the poison pill in Jackass parlance.
S&P accused France of halting the entire reform movement.
Francois Hollande has ordered a
flimsy patchwork of reform measures,
which are fading into obscurity. The
French Economy is stuck in sclerosis.
Its state sector comprises over
56% of GDP, in utter insanity embraced
as socialism, which enables the
earliest worker retirement in Europe. The
budget deficit has remained above
4% of GDP. Industrial production
fell 0.7% in September, the fourth
decline in five months. The risk
is certain for the French Economy
to contract again in 3Q2013. The
S&P agency stated that the
slower economic growth is limiting
the government's ability to repair
public finances, and ongoing high
unemployment has hurt political
support for further significant
fiscal and structural policy measures.
The unemployment is accelerating,
as 3.296 million workers are on
the dole, as compared to 1.983
million in 2008, a hefty 66% rise.
The latest event is thousands of
trucks have blocked French roads
in a nationwide tax protest. They
object fiercely to the French Govt
controversial plan for an tax on
heavy vehicles. The police estimated
2000 trucks (organizers claimed
4000) lined motorways, driving
slowly, and clogging up traffic
into various French cities including
Paris, Strasbourg, Toulouse, Bordeaux,
Marseille, Lyon, and Lille. Consistently
the inept leaders in Paris
choose more taxes rather than a
smaller state bureaucracy with
absurd early aged pensions.

Ambrose added commentary. The heroic fiscal squeeze done by France,
to reduce by 1.8% its deficit in
GDP terms last year, did comply
with EMU demands. But it was at
best self-defeating, and more likely
destructive. France earned a double-dip
recession, with 370,000 people
losing their jobs. Ambrose concluded, "There
is a proper therapeutic dose of
fiscal austerity, and it should
always be offset by monetary stimulus.
Both rules were violated. As S&P
says, Hollande made matters
worse by relying on taxes, not
spending cuts. You do not have
to believe in the Laffer Curve
to see that a country with a Leviathan
state should not keep raising the
tax share of GDP." The
insanity in Paris
continues, expanding the socialist
state network when it should be
drastically reduced. Ambrose believes
the solution is IMF debt relief
in a bridge loan, combined with
currency devaluation. The common
Euro currency makes the solution
impossible. Ditto for Spain and Italy.
The entire European region with
300 million in population cannot
retrench all at once, or else it
woul dcause a vicious cycle in
a downward slide for the whole
system. That is precisely what
is seen here today. See the UK
Telegraph article by Ambrose (CLICK HERE).
Expect more French bank downgrades.
Expect a downgrade of Italy and Spain soon. The end game is accelerating.

BC is a prominent Canadian province in the Western region on the Pacific coast. British Columbia has issued offshore Yuan-denominated bonds,
the first time for any foreign
government. Mike de Jong,
finance minister of the thriving
province, admitted a plan to
raise only CNY 500 million, but
the bond offering was largely
oversubscribed. Upon completion,
the BC Govt issued one-year offshore
Yuan-denominated bonds, raising
CNY 2.5 billion. Central banks
and foreign institutions snapped
up 62% of the issued bonds, with
fund asset managers buying 18%. Along
national lines, Hong
Kong investors took 46% of the
bonds, while 40% went to US investors. The
bonds carry a yield of 2.25%,
while HSBC is the lone broker.
The bonds will be listed in Luxembourg. BC seized the opportunity to lock
in lower costs, with more diversified
financing and investment channels.
In addition, the Chinese Ministry
of Finance announced on November
5th that it will sell DimSum
bonds worth CNY 10 billion in Hong Kong on November 21st, to mark the second issuance this year.
The first issuance was in June,
when CNY 13 billion in such bonds
were sold. See the Caixin article
(CLICK HERE). It should
be noted that Vancouver
has a very significant Hong Kong immigrant population. They came to BC in the last fifteen
years, following the end of the
British affiliation, and brought
a tremendous amount of wealth
with them. They are responsible
for the bland eyesore high rise
apartment buildings, and the
nickname of Hongkouver for the
beautiful city. No attempt whatsoever
was taken to make them appear
attractive, standing in sharp
contrast to more attractive facades
on the skyline. Regard the Yuan-based
bond sale as an extension of
HK local influence.

◄$$$ THE USGOVT DEBT CEILING HAS BEEN SUSPENDED. RATHER THAN ACTING RESPONSIBLY
WITH REDUCED WASTE AND CUTBACKS
IN WAR AND HALTED BANKER WELFARE,
THE USCONGRESS SIMPLY ELIMINATED
THE REQUIREMENT FOR THE USGOVT
TO REMAIN WITHIN A LIMIT. NOTE
THE WRITING ON THE WALL FOR TWO
EVENTS. FIRST, HUGE NEW USGOVT
DEFICITS ARE COMING AS THE RECESSION
DEEPENS. SECOND, A SPLIT
IN THE USDOLLAR COULD BE HINTED
WITH THE MANNER OF USFED ACCOUNTING
FOR ECONOMIC GROWTH. $$$

Signals are clear. Reckless management is obvious. Responsibility is nowhere.
The USCongress took the low road,
the cowardly road, in avoiding
decisions. They voted to suspend
the USGovt debt limit as a requirement
that has stood as law for well
over a century. A few more
$trillion in debt can be tacked
on without any obstacles or resistance,
the fanciful business as usual
to continue. Foreigners will read
the signals better than the Americans,
who are by this time numb by debt.
Expect the foreign dumping of USTreasurys
to likely increase substantially
over the next few months, as the
collapse becomes evident to everyone
except those living inside the
US Dome. Consider it the end game
where most people are not even
aware they are in. See the Before
Its News article (CLICK HERE).

Curiously, the US Federal Reserve tracks the real domestic product in terms
of chained 2009 USDollars among
other indicators. Be sure to
know that the pre-2009 USD and
newer QE-driven USD are different
in legal standing. There would
be no purpose in tracking GDP on
economic growth in the differentiated
USD terms unless doing so had a
meaning. Pressure builds, as foreign
nations and powerful financial
entities demand a resolution. They
are deeply resentful of the USFed
debasing their savings, whether
in the form of national FOREX reserves
or private USD-based accounts. The
meaning could be made clear when
the USDollar splits into a foreign
(intact) version and a new domestic
(devalued) version. The accounting
distinction for economic growth
was found on the StLouis Fed website
(CLICK HERE).

◄$$$ THE USGOVT DEFICITS RISE WITH THE DEEP FESTERING RECESSION, THE
BALL & CHAIN OF SOCIALISM,
AND THE BURDEN OF WAR. THE USFED
BALANCE SHEET GROWS AS IT DISPENSES
EVERMORE TOXIC PAPER. BUT THE BENEFIT
FROM THE CURRENT FISCAL AND MONETARY
ACTIONS ARE NOWHERE. STIMULUS IS
NOT HAPPENING, BUT RATHER A WET
BLANKET THAT KILLS CAPITAL. $$$

Lance Roberts of STA Wealth Mgmt shows in the simple chart below evidence
of the totally slipped transmission.
It has taken $35.17 of government
intervention to generate a single
$1 of USEconomic growth over
the past five years. More
importantly, the rate of diminishing
returns is increasing. In other
words, it is taking consistently
more volume in intervention to
create any incremental increase
in economic growth. The Jackass
contention is that the economic
recession is going worse, hardly
a recovery, with no growth whatsoever.
The great lie remains at least
5% on the price inflation deflator
tool. See the John Williams work
at Shadow Govt Statistics, which
shows the true CPI for inflation
at around 7% to 9% every year. The
True GDP growth rate is between
minus 3% and minus 5%, based
in reality. The only true
beneficial result of the current
hyper inflation is that the systemic
failure and bank system collapse
have been delayed, hardly a notable
item on Bernanke's resume.

Further criticism of the USFed blank check approach has surprisingly come from
Larry Fink of Blackstone. He openly
expressed concern that Bernanke
has built a bubble in its own back
yard, located on its own gigantic
$3.7 trillion balance sheet. Fink
advises the quack professor Bernanke
to halt the bond purchases. Fink
is joined by Carlo Giannone of
T3 Trading Group, who calls the
stock market a sequence of musical
chairs, with outsized stock valuations.
Also, Michael Shaoul of Marketfield
Asset Mgmt expects a steep future
price will be paid for the created
bubble. The pain will come in the
future in the form of higher inflation,
higher interest rates, and more
difficult business conditions.
See the Bloomberg article (CLICK HERE).

## CENTRAL BANKS SUBMIT TO INFLATION

◄$$$ QE IS A GIGANTIC BACKDOOR BAILOUT
WINDOW FOR WALL STREET BANKS. THE
USFED BOND PURCHASE CONTINUES TO
BE DISGUISED AS STIMULUS, WHEN
NONE IS PRESENT. THE USFED HAS
BECOME PLAGUED BY TUNNEL VISION
IN DEVOTION TO WALL
STREET BANKS. THE OVERALL BENEFIT
TO THE USECONOMY IS 1% ON INVESTMENT,
AT MOST BARELY A COUPLE GDP PERCENTAGE
POINTS. THE COST IS CLEAR, IN A
GRAND TOXIC BALANCE SHEET AT THE
CENTRAL BANK, DISTORTED ASSET VALUES,
FREE MONEY FOR THE ELITE, AND DEEP
DEPENDENCE ACROSS THE ENTIRE SYSTEM.
$$$

Andrew Huszar is a former USFed official. In 2009 and 2010, he managed their
$1.25 trillion mortgage backed
security purchase program off the
Fannie Mae trough. He was also
once a Morgan Stanley managing
director. So assume he has some
interest rate derivative awareness.
He wrote a public apology article
in the Wall Street Journal, a mea
culpa piece. Huszar confessed
that the QE bond purchase program
is ineffective, and the USEconomy
is fundamentally unsound. He
had a direct hand for executing
the centerpiece program of the
central bank's first plunge into
the ill-fated bond buying experiment
known as Quantitative Easing. The
central bank continues to spin
QE as a tool for aiding Main Street businesses. He has awakened to recognize the program
for being the greatest backdoor
Wall Street bailout in history.
It is hyper monetary inflation
under thin disguise, designed to
benefit the big insolvent banks,
and help them to unload their still
giant toxic bond portfolios. The
initiative has not done anything
to mitigate economic pain, nothing
to prevent job loss. The bankers
have built walls to prevent any
money from reaching Main
Street. They fear price inflation
to rage. Besides, they want all
the money for themselves.

From the start, USFed Chairman Bernanke sold the QE bond monetization plan
to ease credit distress, to lower
credit costs, to aid the USEconomy
in the downturn. Huszar was tapped
to serve the USFed in the wild
program (as he described it) toward
a project to purchase $1.25 trillion
in mortgage bonds over 12 months.
He has since lost his faith and
exalted perception of the USFed
itself. He regards its independence
to be flawed and eroding, since
devoted to Wall Street primarily. That
it bought any mortgage bonds at
all represented a change in its
century of history, with no precedence.
He believes the USFed did not know
what it was doing. He saw no benefit
to the credit market generally,
and certainly none to the Main Street businesses. The banks were issuing
even fewer loans. He concluded
Wall Street firms were pocketing
most of the extra cash from bond
redemptions. His and other voices
were raised that QE was not succeeding
as planned, but their warnings
fell on deaf ears. No cost versus
benefit carefully weighed analysis
took place, as in past decades
by the central bank researchers. What
overrode was concern over financial
market expectations, not the benefit
to businesses or to the USGovt
deficits. The only benefits were
to the Wall Street firms, in what
Huszar calls an absolute
coup. They saw gains on
the bonds held in portfolios, as
well as outsized gains (fees) from
brokering most of the Fed's QE
transactions themselves. Wall
Street saw its most profitable
year ever in 2009 in stark contrast
to the nosedive in the general
economy. When QE2 was launched,
the German finance minister Wolfgang
Schäuble called the decision clueless.
At that point, Huszar returned
to the private sector at the Rutgers Business School.

The report card on the collective projects is miserable. Over five years, its
QE bond purchases have cost over
$4 trillion. The supposedly
free market advocate nation, the United States, has sponsored
QE as the largest financial markets
intervention by any government
or central bank in world history. The
aggressive QE run over five years
has generated only a few percentage
points of economic growth, a miserable
outcome. By contrast, experts outside
the Fed, such as Mohammed El-Erian
at PIMCO, suggested that the USFed
may have created and spent over
$4 trillion for a total return
of as little as 0.25% of GDP. At
the estimated paltry pathetic $40
billion bump in USEconomic output,
it comes to a 1% return in trickle
down. Both of those estimates
indicate that QE at best is not
working, and at worst is a colossal
failure. Neither the USGovt nor
the USFed nor the Wall Street banks
have provided any leadership, guidance,
or solutions to what Huszar calls
the structurally unsound USEconomy. A
deep dependence has been fostered
and institutionalized, where the
financial system, its markets,
the credit market, big businesses,
and the economy are woefully dependent
upon the USFed and its continuation
of QE.

Huszar calls QE the Too Big to Fail monetary policy that cannot be taken offline.
Then comes the global effect on
the higher cost structure, a nightmarish
dinner plate. Expect QE to Infinity
to be endorsed and continued during
and after the transition to a Yellen
Fed. The dysfunction in WashingtonDC
has resulted in dutiful service
by the USFed, resulting in a gigantic
and toxic central bank balance
sheet. See the Wall Street Journal
article (CLICK HERE).
Also see the Before Its News article
(CLICK HERE)
on the mechanics of QE as policy,
and the actual destruction of the
USEconomy under its guidance.

◄$$$ NO EXIT AVAILABLE FOR THE USFED IS BECOMING MAINSTREAM NEWS. THE
FED CAN ONLY FAIL, IN FULL VIEW
ON THE GLOBAL STAGE. $$$

Numerous are the references to the USFed having no alternative but to continue,
that the US financial structures
are imbalanced, that the US financial
market has grown dependent upon
the central bank accommodation.
The mainstream is awakening to
the dilemma. Pater Tenebrarum is
an independent analyst who writes
under the pseudonym Acting Man.
He has shown consistent wisdom,
from the berm of the mainstream
but with pathways at times on the
sound money trail. He pointed out
that Deutsche Bank argues no
tapering will actually occur, while
SocGen of France has gone one step
further with an expectation of
a QE volume increase. He gave
emphasis to the futility of the
Bernanke Theory, an obvious genuflection
to the banker altar, for asset
bubbles they create. The Acting
Man highlights the production of
capital versus consumer goods in
the USEconomy, which reflect credit
bubble distortions. See the Acting
Man article (CLICK HERE)
whose message is No Exit.

Tenebrarum wrote, "Even though new bubbles may be staring everyone
into the face, central banks
must not make the mistake to
stop easing too early. It is
held that that would endanger
the recovery, similar to what
happened in the US in
1937 and Japan in
1996. While it is true that
the liquidation of malinvested
capital would resume if the monetary
heroin doses were to be reduced,
the only alternative is to try
to engender an eternal boom by
printing evermore money. This
can only lead to an even worse
ultimate outcome, in the very
worst case a crack-up boom that
destroys the entire monetary
system. One of the reasons why
we remain convinced that the
widely hoped for return to a
Normal Expansion is not likely
to occur is that we have
some evidence, tentative though
it may be, that the economy's
production structure has been
severely distorted again
by the Fed's interest rate manipulations
and the huge growth in the money
supply it had to engender in
order to keep interest rates
below the natural level dictated
by time preferences. As one of
our readers frequently point
out in the comments section, the
policy is mainly a stealth bank
bailout, as money is transferred
from savers to banks in order
to avert the liquidation of unsound
credit. How much unsound
credit is still clogging up the
system after the 2008 crisis?
We unfortunately do not know,
as bank balance sheets have
become even darker black boxes than
they already were after mark-to-market
accounting was suspended in April
of 2009. No doubt people who
have the time to study the hundreds
of pages of bank earnings reports
with their endless footnotes
in detail could come up with
estimates, but apparently nobody
really takes the time to do that.

Once
the economy's capital structure
is distorted beyond a certain
threshold, it will not matter
anymore how much more monetary
pumping the central bank engages
in. Instead of creating a temporary illusion of prosperity,
the negative effects of the
policy will begin to predominate
almost immediately. Given that
we have evidence the distortion
is already at quite a ripe
stage, it should be expected
that the economy will perform
far worse in the near to medium
term than was hitherto widely
believed. This also means that
monetary pumping will likely
continue at full blast,
as central bankers continue
to erroneously assume that
the policy is helping the economy
to recover." The Acting Man describes a accelerating
centrifuge that has slipped
out of gear.

Doug Noland covers the field of blemishes. He sidesteps any discussion of the
dependence upon Interest Rate derivatives
to maintain the bubble that he
identifies. But the Jackass believes
he does not comprehend them, or
is not permitted to discuss them.
Some great depth is shown in his
analytic summary of the trapped
USFed, exposing its hubris and
arrogance. He focuses on their
deep broad delusions on effects
and control. He wrote, "One
of these days the Fed and its flawed
doctrine will be held accountable.
For now, the Fed and Wall Street
can continue to pretend this massive
ongoing monetary inflation makes
sense. They can pretend that a)
you cannot recognize a Bubble until
after it bursts, that b) pegging
short-term rates at zero for years
does not foment massive financial
distortions and economic maladjustment,
that c) this is not a redistribution
of wealth on an unprecedented scale,
that d) central bankers should
rely on regulation instead of monetary
policy to address mounting financial
excess, and that e) aggressive
reflationary measures can always
be employed to counter bursting
Bubbles. They can pretend that
1) we are not witnessing the greatest
financial bubble in history, that
2) trust in money, financial assets,
and central banking is not at stake.
And they can pretend that 3) they
will retain effective tools for
stabilizing the system the day
this massive global bubble begins
to really unwind. If there is historic
precedent for aggressive inflationism
employed over an extended period
without catastrophic consequences,
that would be news to me." Noland
gives dire warning. Another gem
graphic art work by Pawel Kuczynski
to depict the banker elite class
at the public trough, doing what
they do best, eating and getting
fat.

◄$$$ SLIPPED TRANSMISSION AND STRIPPED GEARS GO ALONG WITH EXCESSIVE
DEBT NOT FINDING TRACTION. THE
MISSING LINK IS A CORE OF US-INDUSTRY,
NO LONGER PART OF THE USECONOMY.
IT WAS SHIPPED TO ASIA,
THE PROCESS BEGAN IN THE 1980 DECADE.
IT NEVER STOPPED. $$$

Market analyst Chris Martenson argues in his new commentary, "The Fed
Can Only Fail" that
a debt explosion will lead to
a failed system. The level of
total debt in the United States is growing
much faster than the USEconomy. Martenson
expects the debt will result
in a currency devaluation, which
will involve a transfer of wealth
from financial assets to real
assets. Notice that since
the United States broke the Bretton
Woods Gold Standard in 1971,
the explosion in debt followed.
No controls have existed. See
the Peak Prosperity article (CLICK HERE).

◄$$$ DEUTSCHE BANK BELIEVES YELLEN MAY ACTUALLY HAVE TO INCREASE QE BOND
PURCHASE VOLUME. THE REASON EXTENDS
BEYOND THE DAMAGED AMERICAN VESSEL.
THEY EXPECT A BREAKDOWN IN CHINA WILL URGENTLY REQUIRE THE USFED TO AMPLIFY
THE QE MONETIZATIONS IN THE FORM
OF AID FOR CHINA. THE GLOBAL ECONOMY IS AT RISK. CHINA IS
SLOWING DOWN SUDDENLY. AS FOOTNOTE,
DEUTSCHE BANK REMAINS ON THE EDGE
OF CORPORATE FAILURE, DUE TO ITS
DERIVATIVE BOOK. $$$

Jim Reid of Deutsche Bank believes the next source of global economic contraction
could result in an increase in
QE bond purchase volume, seen
in China.
However, he expects the proximal
cause will not be the United States, but rather China. Their economy is slowing
down in a grand manner. Up until
now, the USFed has based almost
all decisions on US data and
US markets. Recall that when
the Lehman failure occurred in
2008, China was
called upon to serve as the global
dynamo on its marginal cylinder.
If Deutsche Bank analysts are
correct, it will be up to the
USFed to offset the tremendous
Chinese problems. Its export
market customers are all in a
grand stall. Therefore the New
Normal Paradigm (queer to be
sure) will dictate that the worse
the news out of China,
the better for stocks, since
the USFed will be urged to prime
the pump.

The Chinese Economy is slowing on activity, on industrial production, on retail
sales, with a rising price inflation
chaser. The much awaited Third
Plenum meeting in China has begun. A wide ranging
package of reforms will follow,
in terms of industry deregulation,
financial liberalization, reforms
to land titles, reforms to state
owned enterprises, and changes
to social security. Despite
hope and excitement for such reforms,
the challenge on implementation
will be difficult and slow. Watch
the slowdown gather momentum in China. Then watch the reaction by Yellen and
Draghi. The USFed and EuroCB will
face enormous pressure. The only
engine at work on the global stage
is the series of Weimar printing presses, as very few capitalist engines are functioning.
The sudden provocative thought
could soon be that Yellen may actually
have to increase QE. See the Zero
Hedge article (CLICK HERE).

Dave from Denver pitched in. He wrote, "Deutsche Bank's derivatives
holdings are melting down. Just
got off the phone with a good
friend of mine who worked at
Bankers Trust when I was there.
He stayed on DB after DB bought
BT until about 2005. He spoke
to an ex-colleague of his who
was there even longer and who
still talks to people there.
My buddy was in a group that
always seemed to know what was
happening internally in the executive
suite way, before it became general
news at the bank. Apparently
DB's derivatives mess is way
worse than has been disclosed
in public. The way it was stated:
Anshu Jain's derivatives empire
is collapsing. Jain took
over the derivatives business
when DB took over BT, [where]
Jain eventually became CEO. He
is one of the sleaziest dudes
on Wall Street." The
report confirms the forewarning
given by the Jackass back in
the summer months (three or four
months ago) that Deutsche Bank,
Barclays, and Citigroup were
teetering on the edge of bank
failure, each desperately bolstered
and propped. Later, the legal
troubles over derivatives accounting
fraud by DBank further raised
their risk. They have been focused
on for pressure to increase collateral
for their wrecked derivatives.
Given the legal rope tied around
them, and the many VPs flipping
to cooperate with prosecutors,
DBank remains the primary focus
for bank failure. All the big
Western banks are lashed together,
so that when one fails, several
will fail in unison, a grand
chain reaction.

◄$$$ OCTOBER MORTGAGE APPLICATIONS COLLAPSED, DESPITE VERY LOW LOAN RATES.
THE US-HOUSING MARKET IS GOING
INTO REVERSE, WITH BADLY FALLING
HOME SALES. THE RECOVERY IS NOWHERE.
THE DEPRESSION IS TAKING HOLD OF
THE USECONOMY. $$$

October mortgage purchase applications collapsed to decade lows. In the
first week of November, home
loan applications plunged at
nearly the fastest pace in nine
months, falling to their lowest
since February 2012. The
volume is running 20% below the
May brief spurt. Worse, this
is the lowest level of mortgage
purchase activity for this time
of year in a decade. The plunge
has created a problem. Morons
like the Bank of America CEO
are on record saying home purchases,
not refinances, boost the economy.
Such nonsense is commonly heard,
when any true boost comes from
capital formation, value added
production, and job creation,
with actual income flows. Moynihan
should stick to narco money laundering,
his sidebar specialty. See the
Calculated Risk article (CLICK HERE).

Three weeks ago, the National Assn of Realtors released its report on September
existing home sales. It was dismal,
showing a 1.9% decline on seasonally
adjusted sales, on an annualized
basis. As usual, a deeper look
behind the adjusted numbers shows
a much bigger decline. The US housing
market is fundamentally in deep
trouble. The August number was
revised down substantially from
the 5.48 million homes, whereas
originally reported at 5.39 million. Thus
the true decline from August to
September was actually 3.5%, a
great deal worse than reported. They
choose to report the decline versus
the unrevised level. Furthermore,
the August sales were flat compared
to July. The originally reported
August 1.7% gain has vanished.
The market was starting to slow
down considerably over the summer
despite reports that were released
showing the contrary. The economic
data tends to focus on the loan
applications, when many are rejected
or do not occur due to borrowers
backing out. Each month the
same story, it seems. The unadjusted
data tells a horrendous story. If
one looks at the actual data, not
the seasonally adjusted data, it
shows a stunning 17.4% drop in
sales from August to September. See
the Seeking Alpha article (CLICK HERE).
The bank cartel must pull the benchmark
10-year USTreasury yield down to
2.0% in order to further inflate
the housing bubble. It is urgent
to remove the 30-something year
old kids out of their parent basements
and into their own starter homes.

◄$$$ MARK FABER EXPECTS THE USFED COULD INCREASE QE VOLUME BY DOUBLE
OR MORE IN THE COMING MONTHS, MAYBE
EVEN TO REACH $1 TRILLION A MONTH.
HIS VIEWPOINT IS NOT TO BE QUICKLY
DISMISSED. BAILOUTS OF BANK DERIVATIVES
COULD SOON BE OPENLY INCLUDED,
SURELY HIDDEN NOW. EXPECT FOREIGN
DIVERSIFICATION OUT OF USDOLLARS
TO OCCUR SOON, LIKE IN THE WAKE
OF A MAJOR SAUDI GUIDELINE CHANGE
ON CRUDE OIL PAYMENTS. THE PETRO-DOLLAR
IS TO SEE A SUNSET. $$$

Marc Faber is outspoken and a bit of a wild man with occasional exaggerations.
His pronouncements lie in the same
Jackass trajectory usually, but
extended. He said, "The
question is not tapering. The question
is at what point will they increase
the asset purchases to say $150
billion, $200 billion, a trillion
dollars a month." See
the CNBC Squawk Box interview,
which CNBC chooses to present in
order to claim that they are balanced
(CLICK HERE).
His estimation is entirely correct
in the Jackass view, for two reasons. The
bank derivatives must be factored
in for the outsized but hidden
USFed support. They are burning
down the Wall Street bank books
here and now. Also, foreigners
will accelerate their diversification
of USTreasury Bonds held in reserve.
They object to the unilateral monetary
policy (no foreign advice requested
on important decisions that affect
them). The Russians and Chinese
are busily engaged in dumping of
USTBonds in asset sales and large
energy contract sales. It is the
new liquidation currency of choice
for the grand deals. The bonds
are returned to sender, in New
York and London, where they cannot be refused. Faber is
wild in his numbers. He should
have stopped at $150 to $200 billion
per month, surely sensational still.
Full agreement here, but a forecast
of $1 trillion per month should
never be put in print. Clearly
the USFed must cover the derivative
losses that are mounting and still
hidden. One must wonder how much
longer they will remain hidden.
We are due for a group of London
Whales sighted. The time has come
for the Petro-Dollar to die its
horrible death. It will deliver
Wall Street a loud wakeup call.

EuroRaj pitched in with an opinion on the magnificent non-linear upcoming ramp-up
in the USFed QE volume of monetization.
He wrote, "It will not
be a gradual and step function
increase. That time has come and
gone, seen over the last five years. The
possibility of a sudden and overnight
gigantic QE volume increase as
part of the Global Reset is upon
us. Another hunch here. The
market is possibly moving towards
a point whereby the Saudis will
be forced to accept for their own
survival the EUR [Euro] and CNY
[Chinese Yuan] as well as USD as
payment for crude oil. The rhetoric
is certainly moving in that direction. If
so, then foreign banking systems
will shed USTBonds in a big way,
as they diversify their reserves
out of USDollars. My focus
is on two markers to accelerate
this process, a) the compromises
Obama makes towards Iran in terms of lifting
of sanctions, and b) talks on the
Keystone pipeline final approval."

## DRAGHI EUROCB DEFIES GERMANY

◄$$$ IN A STUNNING MOVE, THE EURO CENTRAL BANK CUT RATES BY 25 BASIS
POINTS. THE RECESSION IN THE EUROZONE
IS UGLY. THE BIG BANKS ARE INSOLVENT.
THE SOVEREIGN BONDS ARE AILING.
THE PAPER MACHE SOLUTIONS ARE BEING
CHALLENGED. THE DECLINE IN THE
EURO CURRENCY COULD SHINE LIGHT
ON THE MOTIVE, AS THE COMPETING
CURRENCY WAR ADVANCES. THE EURO-CB
IS ON PAR WITH THE USFED AND BANK
OF ENGLAND IN USING THE DESTRUCTIVE MONETARY MACHINERY.
THEY WILL RAISE RISK OF FURTHER
ASSET BUBBLES, WHILE LIFTING THE
COST STRUCTURE. THE STORM VORTEX
WILL INTENSIFY. NO SOLUTIONS WILL
COME, ONLY GREATER STORMS. $$$

Almost a uniform consensus of economists and strategists (67 of 70) predicted
no rate cut by the Euro Central
Bank, probably out of habit without
benefit of thought. The EuroCB
cut the official rate from near
nothing to next to nothing. Analysts
call it a stunning move, but the
message is more bizarre. It cut
rates for both the main REFI rate
and the marginal lending facility
by 25 bps, to 0.25% and 0.75% respectively.
The new rates went into effect
on November 13th. The new consensus
belief is that the EuroCB reacted
to Europe's
encroaching deflation. The impact
on the FOREX was notable but brief,
and within several days a fizzle.
The Euro had topped near 138 in
the last week of October. With
the USGovt shutdown having been
pulled off the billboards and some
form of new EuroCB easing made
to seem likely, the Euro dropped
quickly to 135 at the beginning
of November. The surprise rate
cut sent it on a downdraft to a
133 handle, but it returned almost
to 135 on short covering. There
must be a recognition that the
Euro and USDollar are equally wrecked
by currency debasement and ultra-low
rates. See the Zero Hedge article
(CLICK HERE).

The European Central Bank rate cut should be viewed
as a confirmation that the EuroZone
is equally crippled as the United
States,
both financially and economically.
The major central banks are locked
in a race to the bottom, but
somehow when it is Draghi versus
Bernanke, the game is described
as cooperative monetary easing. But when Asian central banks do the same, it is competiting currency wars.
The competitive debasement surely
extends from the Asian export
advantage sought and secured.
Fears are growing that a long
period of stagnation will settle
into Europe, like what has afflicted Japan.
The ECB cut reinforced a vow
last year by Super Mario to do
whatever it takes to preserve
the EuroZone. Translate to mean
whatever it takes to protect
the big banks from a skein of
failures, sufficient to cause
a wrecking field. The buzz is
that the central bank was reacting
to a sudden drop in EuroZone
inflation, which fell to an annual
rate of 0.7% in October, well
below its official target of
about 2%. The decline raised
the specter of deflation, which
is a boogeyman not the least
properly understood. Deflation
is better described as widespread
liquidations during business
failure. The true threat has
been transformed from falling
asset prices to rising costs,
neither beneficial. So the
poison will be lost wealth or
lost business profitability.
It is a Sophie's Choice, just
like in the United States.

Draghi insisted that the ECB was not expecting any catastrophic situation.
He denied any grand fall in prices
across a large category of goods,
and across a broad number of countries.
He denied the European situation
resembles Japan. The absurd consensus is that the ECB rate
cut will be stimulative for economic
growth. It will not. Instead
the rate cut will cause a rise
in the cost structure, help to
kill more capital, and result in
more job cuts, even larger national
deficits. Regard the rate cut
as a beneficial bone tossed to
the big banks on lending capital.
So finally the USFed, Bank of England,
and EuroCB are on the same ground
with equally destructive inflation
and equally ruinous ultra-low rates.
Since the monetary spigot is extended
easily across the Atlantic
Ocean by means of the USDollar
Swap Facility, the three central
banks are on similar pillboxes
floating adrift in a vast sea of
liquidity. The low rates wreck
financial markets and distort capital
values. The easy money undermines
the currencies and lifts the cost
structure. No solution is to be
seen. The many nations in the fractious
17-nation Euro Monetary Union cannot
afford to stimulate their economies
through more spending. The Western
nations are trying to cut spending
and waste, when they should attempt
to attract industry back from Asia. It
is called capital formation, the
essence of capitalism, a concept
long forgotten in the socialist
camps that have come to dominate
the West.

On the other side, the French finance minister Pierre Moscovici indicated that
the rate cut provided needed support
for the ongoing recovery by limiting
the risk of deflation. The socialists
are morons on all matters of the
economy and monetary policy. The
German banking group expressed
displeasure, pointing out that
savings will be harmed, and asset
bubbles will become a renewed danger.
They see no deflation threat. Given
the enormous monetary expansion,
the door is open both to asset
bubbles such as the stock markets
and to rising cost structure, which
will intensify the economic recession.
Thus the ZIRP stir and the QE swirl
will continue to produce a combined
low pressure and high pressure
zone, a veritable destructive hurricane. Draghi
has overruled the German objections,
and will earn their anger. The
dissenters on the ECB Governing
Board were not identifed, but assume
they were led by the Germans and
their camp. The Voice expects
the Germans before long to exit
the Euro currency, but without
a definition of what soon entails.
Be sure to know he does not mean
a couple more years. See the New
York Times article (CLICK HERE).
For another interesting perspective,
check out the deflationary Southern
Europe versus the inflationary United
Kingdom with
its own printing press. See the
Business Insider article (CLICK HERE).

◄$$$ A HUGE NEW EURO-CB BOND MONETIZATION ROUND IS NEXT, WITH MAJOR FINANCIAL
MARKET INTERVENTIONS. THE GERMAN
RIFT HAS GROWN WIDER. THE LATIN
NATIONS HAVE BEGUN TO DOMINATE
THE DRAGHI EURO CENTRAL BANK. THE
PRIORITY TO HALT THE DEFLATIONARY
DECAY AND EXTREME ECONOMIC RECESSION
IS SEEN AS A HIGHER PRIORITY THAN
CORROSION TO GERMAN SAVINGS. THE
ALTERNATIVE OF GERMANY EXITING
THE EURO CURRENCY IS GROWING, MORE
OPENLY SEEN AS AN OUTCOME. $$$

The strong nations were critical of the EuroCB rate cut. The weak nations approved
of the decision. Strangely, as
the Voice has pointed out, the
wrecked South is led by Catholics,
and the productive North is led
by Protestants, something never
noted in the press. Germany generally fears that
looser money will lead to profligacy
among the EuroZone's more financially
troubled members. The major publications
are ripe with negative feedback.
The Financial Times has an op-ed
piece by Hans Werner Sinn of the
IFO Institute for economic research,
harshly criticizing the ECB for
cutting rates. The Bild Zeitung
fired off tabloid anathemas over
the destruction of German savings
by the Goldman Sachs syndicated
EuroCB. The Bundesbank's Andreas
Dombret openly accused the ECB's
near zero rates as posing risks
for financial stability in Germany.
The latest cover of a German business
magazine Wirtschafts Woche pictured
an arrogant Mario Draghi, not flattering. The
EuroCB is preparing the way for
another massive round of bond monetization,
certain to bring a significant
fracture with the Germans, perhaps
a final fracture. A quick Jackass
commentary, in response to Sinn,
who speaks for a nation offended
for thefts essentially of their
savings. Pressure builds. When
a nation has its savings ransacked
by a Goldman Sachs stooge like
Draghi at the EuroCB, it causes
a reaction. When the German nation
is given blank worthless assurance
on the collateral, the reaction
accelerates. When the process is
repeated, the reaction approaches
a critical level for significant
change to occur. Germany will leave the Euro
someday soon, the timing very uncertain.
The event is a certainty. It will
be closer to a few months than
to a couple more years.

The ECB's Peter Praet, board member in charge of setting economic policy, gave
a surprising interview to the Wall
Street Journal. The central bank
is opening the floodgates for bond
purchases and market intervention.
The gradual collapse and pathetic
EuroZone economic stagnation have
caused a revolt finally. The ECB's
Latin majority refuses to accept
the Bundesbank direction any further.
Praet said, "If our mandate
is at risk, we are going to take
all the measures that we think
we should take to fulfil that mandate.
That is a very clear signal. The
balance sheet capacity of the central
bank can also be used. This includes
outright purchases that any central
bank can do. The rules do not exclude
that you intervene in the markets
outright. For some decisions it
is easier than others [to gain
consensus]. One thing is clear:
the Governing Council has been
able to decide. That is really
the message." The Germans
are openly angry. A conclusive
final split is near.

Even Ambrose Evans-Pritchard foresees the eventual departure by Germany from the European Union in more ways
than just the common currency.
Ambrose concluded, "The
North-South crisis goes on. It
merely changes shape. German political
consent for the EMU Project will
be tested further. The nub of
the matter is that any policy set
at this stage for Club Med needs
is destructive for Germany, and
any policy set for German needs
is destructive for Club Med. You
cannot set a workable policy. The
intra-EMU gap is already too wide.
The levels of destruction are asymmetric.
A bout of deflation for Italy is
far more serious (for everybody
in the end), than a bout of inflation
in Germany. But that
is a macro-economic analysis. This
drama will be decided by politics.
The German people have their own
firmly-held view. As an amateur
anthropologist, I respect the idiosyncratic
cultures of Europe's
historic nations, so I do not
wish to join Romano Prodi in denouncing
the Germans for being as obsessed
with inflation, as teenagers are
obsessed with sex. Mr Prodi should
have thought about that a little
harder when he took Italy into a currency union with Germany in the first
place.Europe's
peoples are what they are. That
is precisely why we Euro-skeptics
have always argued that forcing
the pace of EU integration is a
very dangerous thing to do. As
for the looming civil war within
EMU over monetary policy, there
is an easy solution. Germany
can politely withdraw from the
Euro, and the South can politely
agree that this would on balance
be an understandable action. Everybody
could be on best behaviour, seeking
to demonstrate to the world that
matters are under control." See
the UK Telegraph article by Ambrose
(CLICK HERE).
The German split is becoming a
mainstream item discussed, proposed,
and argued.

EuroRaj added some astute commentary, his thoughts, my edits for prose. He
pointed out that France, Italy,
and Spain are
all in the same dire situation,
a predicament without solution
for their economies and financial
structures. If they threaten Germany with more amplified QE bond monetizations, Germany will
tell them to keep their broken
Euro currency, and depart from
the common Euro fold. The choices
for the Draghi EuroCB and the Bernanke
USFed (soon the Yellen Fed) are
identical. Either make the banks
go through bankruptcy and clear
out their fictitious inflated assets,
or else hyper-inflate everything
across the board. The former
option means tremendous disruptions,
but progress eventually like in Iceland. The latter option means the system continues
with growing stress and strain
until it explodes and collapse,
with no progress and possibly global
war. There is nothing new in these
choices. They have been the same
since mankind adopted fiat as a
means of exchange and used gold
as a means of savings. The widespread
screaming for final difficult decisions
has been heard since 2010, but
practically it cannot be done.
Draghi has been trying to corner
Merkel and the Bundesbank in an
ongoing skirmish, using various
tricks, but has failed because
he legally cannot print money.
The strong Euro currency is making
life miserable across Europe, while depression continues. The governments of France, Italy,
and Spain are
nothing but members of a puppet
gallery to conduct US foreign
policy.

## BANKS IN FINAL COLLAPSE STAGE

◄$$$ A BIG BOLD DEBT DOWNGRADE WAS MADE BY MOODYS OF SEVERAL WALL STREET BANKS. THE FALLOUT COULD REACH INVESTMENT FUNDS, WHICH
MIGHT BE BLOCKED FROM HOLDING THEIR
BONDS IN PORTFOLIOS. FURTHERMORE,
THE PRESCRIPTION FOR RESTRUCTURING
IS SUGGESTED, ON THE BACKS OF CREDITORS,
NOT DEPOSITORS. ATTACK ON THE BANK
FORTRESS. CARRY ON THE SPECULATION
TOWARD THE JPMORGUEN COMMITMENT
OF IRS-FUNDS AND THE DEPLETION
OF THEIR GOLD INVENTORY. THE GREAT
TIPOFF WAS THE SUDDEN DISCOUNTED SALE OF THEIR HEADQUARTERS TO A CHINESE PROPERTY
CONGLOMERATE. SOMETHING BIG IS
HAPPENING, AS SMOKE BILLOWS OUT
OF THE MARBLED JPM HQ OFFICES.
THE MORGUE IS COLLAPSING. $$$

The downgrade was bloody and very unexpected. The US-based ratings agencies
must feel pressure to finally do
their job well, and foretell of
a bank failure. It would be very
embarrassing (again) if a group
of New
York banks failed, but with rosy
debt ratings. The news came suddenly.
Bank of New York was cut to A1
from Aa3 (double hit), and Goldman
Sachs was lowered to Baa1 from
A3. JPMorgan was cut to A3 from
A2, and Morgan Stanley was downgraded
to Baa2 from Baa1. Subordinated
debt ratings were also lowered
for BNY Mellon, Goldman Sachs,
JPMorgan, and Morgan Stanley. In
contrast, Citigroup's Citibank
NA subsidiary had its long-term
deposits upgraded to A2 from A3
and short-term rating lifted to
Prime-1. Bank of America's long-term
deposit rating was raised to A2
from A3 and its short-term rating
was upgraded to Prime-1. State
Street Bank & Trust had its
long-term deposit rating and subordinated
debt downgraded.

The Moodys public statement was direct, and flies in the face of the entire
Bail-in procedure being promoted
in the West. It addressed bank
failures and the procedure called
in reaction. They stated, "We
believe that US bank regulators have made
substantive progress in establishing
a credible framework to resolve
a large, failing bank. Rather than
relying on public funds to bail
out one of these institutions, we
expect that bank holding company
creditors will be bailed-in and
thereby shoulder much of the burden
to help recapitalize a failing
bank. See the Bloomberg
article (CLICK HERE).
That is a big WOW, a shot across
the bank syndicate bow. The next
impact could be rejection by pension
funds, mutual funds, and financial
firm managed funds, which cannot
engage in investment in these NY
corporate bank bonds when below
investment grade.

The downgrade of JPMorguen and Goldman Sachs hints at a possible USGovt downgrade
within three to six months, which would cause problems within the financial
world. Imagine the impact if USTreasury debt securities lost their coveted
pristine status of highest quality investment grade. EuroRaj calls the
downgrade a major black swan alert. He went further in speculation, wondering
if the downgrade indicates severe problems in the IRS funds and Gold
Pool arena, whereby committed IRS income stream from income taxes is
devoted toward the Interest Rate Swap derivatives. Also, the JPM/GS
gold positions might finally be in dire straits from lack of physical
gold inventory, with some major capital removal having occurred. The
drainage of the JPM gold vaults, closely tied to the COMEX, has been
going on for several months. The debt downgrade is a much bigger event
than what most people might estimate. It received extremely little
follow-up analysis and commentary. JPM might have suffered some giant
derivative losses that are seeping through to the surface.

EuroRaj puts forth the theory that JPMorguen was forced to pledge the IRS income
stream as collateral in a special
past derivative trade. He reasons
that China might have rejected usage of
more USTreasurys as collateral
in an IRS derivative trade, possibly
the chain reaction begun with the
USGovt shutdown. The aggregate
income by US citizens has been
reduced in the current ongoing
severe recession that borders on
depression. The JPM commitment
with IRS income might have come
up short to meet Chinese obligations.
Also, and this is a long shot,
from the Jackass (not EuroRaj), perhaps
JPMorguen committed IRS income
in the great gold lease in 1999
that came in the same deal for
the Most Favored Nation trade status
granted by the Clinton Admin.
With the Wall Street renege to
return the leased Chinese gold,
perhaps an IRS income commitment
might have come up short in resolution,
and the Beijing
bankers have refused more tainted
USTreasury Bills. The confirmation
to this hypothesis could possibly
be formulated from the heavily
discounted price the Chinese paid
for the JPMorguen HQ commercial
property complex in South Manhattan,
which happens to house the world's
largest private gold vault facility.
Refer to One Chase Plaza.
Curiously, Donald Trump might be
in a similar pickle. He would only
sell a $95 million mansion if there
was a margin call on him, whereby
a counter-party rejected USTreasurys
as collateral.

A savvy colleague KevinF with extensive professional credit market experience
added a comment. My tease to elicit
a response came in the form of
a theory that Moodys has sniffed
out some big holes in the JPMorguen
balance sheet from derivative losses
of many types. KevinF does not
believe Moodys has sniffed anything
out. He believes the ratings agencies
(all Big Three) exist as window
dressing only, to belatedly point
out problems with the big New
York banks, after the fact. They
come out with downgrades only after
the entire financial community
and even foreign governments already
have a strong inkling, done in
a late confirmation. They exist
with a working charter 1) to maintain
the illusion to the general public
of valid credit market scrutiny,
2) to ward off potential rivals
controlled by forces outside of
the Wall Street club with a more
critical eye toward transparency.
The Jackass believes KevinF is
correct in his perspective generally,
except that JPMorguen has additional
deeper troubles with high likelihood.
The huge black swan that appeared
on the South Manhattan pond was the sale of the JPM HQ, at perhaps half its
value. Something big has gone
wrong with their financial situation.
The IRS income stream and the Gold
vault depletion seem like areas
of severe problems. In a recent
Hat Trick Letter Money War Report,
Rob Kirby explained how JPM has
been using the IRS income stream
commitment in its high risk leveraged
derivative book management. The
income stream provides the collateral
for Interest Rate Swap contracts,
used to control the USTreasury
Bond yields, all overseen with
the Exch Stabilization Fund run
by the USDept Treasury.

◄$$$ JPMORGUEN HAS SOME FRESH NEW LEGAL FRONTS TO DEFEND AGAINST. INDICATIONS
ARE THAT THE NEW PROSECUTION WILL
BE LIKE A LIBOR EVENT BUT IN CURRENCY
DERIVATIVES. THE LOSSES WILL BE
HUGE, AND THE PUNISHMENT MIGHT
BE MORE DRACONIAN, ENOUGH TO ALTER
ITS FINANCIAL COURSE. $$$

Matt Taibbi in another strong editorial has pointed out that Chase is not the
only bank in trouble. It looks
like the houses of Wall Street
banksters are blowing down. He
cites JPM as the target of eight
current official high profile investigations.
He notes a sense of desperation
as they even sold their home headquarter
complex for a discount price recently.
It was reported that European banks
have over $3 trillion in bad loans
on the books, in similar conditions.
The instability of the Western
financial structures finally is
coming into view. Something
big is near, such as a string of
major bank failures. Confidence
on a global scale is being eroded
at a rapid pace. See the Rolling
Stone article (CLICK HERE).
As footnote, Forbes magazine, a
prominent publication not prone
to fiction or reckless claims,
has made a formal rebuttal statement.
They state that JPMorguen is not
limiting financial transactions
after all, either withdrawals or
wire transfers. Colleague Roger
Weigand is an account holder with
JPM, and he personally confirmed
by email that he received a formal
notice about limited transactions.
Strange sequence. See the Forbes
article (CLICK HERE).

Taibbi reports multiple scandals blowing up in the next
few weeks, including a fresh
set of ominous legal cases that
target several big New
York banks. The outcome could
result in punishments so extreme
that the long-term future of
the financial services sector
might be significantly altered,
in his words. If
true, the situation is about
to turn dire for these criminal
pillars, as in the risk of survival
might be openly debated, along
with dreadful and hideous evidence.
The loan loss reserves put aside
for settlements will be grossly
inadequate. The Jackass has repeatedly
stressed how the big US banks
have released loss reserves almost
every quarter, in order to fabricate
new earnings, the exact opposite
of what they should do. They
will need new reserves to handle
losses that will be forced out
into the open, off their accounting
books.

Taibbi cited a huge case involving possible manipulation of the world currency
markets, using FOREX derivatives.
It would be extremely significant
if some of the Wall Street banks
are charged with the same multi-$billion
FOREX derivative fraud activity,
the same as Deutsche Bank. The
scandal is already generally
drawing comparisons to the last
big financial scandal, the LIBOR
frauds, called the largest in
history. Even the Financial Times
has wondered about a repeat LIBOR
scandal. One and a half years
ago, the manipulation of interest
rates via the gaming of the London
Interbank Offered Rate (LIBOR)
made the big news. It never went
away, but also never saw any
severe legal implications like
$100 billion lawsuits. The system
shoved it under the rug effectively.
Eclipsing the interest rate market,
the foreign exchange market (FOREX)
is the largest financial market
in the world, with a daily trading
volume of nearly $5 trillion.
The tipoff of trouble has been
the deep woes with Deutsche Bank,
whose FOREX derivatives are under
prosecution for massive fraud.
Given all the flipped Vice Presidents
on the DBank payroll, the prosecution
has extended to New
York.

◄$$$ CITIGROUP AND JPMORGUEN REPORTEDLY PUT SENIOR CURRENCY DEALERS ON
LEAVE FROM THEIR LONDON POSTS. SOMETHING BIG AND UGLY IS BREWING, AS SMOKE STREAMS
FROM LONDON
CITY OFFICES. $$$

Citigroup and JPMorgan Chase have put some of their top London
currency dealers on leave, after
regulators began a formal probe. Under
investigation are their alleged
manipulation of foreign exchange
rates in the FOREX market, a possibly
louder echo to LIBOR itself. They
came across usage by traders of
an instant message service, according
to the rumor mill. Two men have
been identified as sent on leave,
Rohan Ramchandani (Citigroup head
of European spot trading) and Richard
Usher (JPMorgan chief dealer in London). See the Bloomberg article (CLICK HERE).
The story ties in well with the
Taibbi story.

◄$$$ US-SENATORS HAVE INTRODUCED LEGISLATION TO STAMP OUT TAX DEDUCTIBILITY
ON LIKELY JPMORGAN ACCOUNTING FOR
LEGAL COSTS IN GRAND SETTLEMENT
CASES. THE SPEARS ARE BEING TOSSED
AT THE JPM FORTRESS, AS IT IS UNDER
ATTACK. CRIME TURNED INTO A COST
OF DOING BUSINESS MIGHT SOON HAVE
NO TAX BENEFIT. $$$

Although JPMorguen rules the roost with Goldman Sachs on both Wall Street and
the USGovt financial arm, it is
under attack by a corner of the
USCongress. To be sure, bribery
goes a long way with both Senators
and House Representatives. The
strategy used by JPM, GSax, Citi,
and others has been to use heavy
campaign donations and basic bribes
to control the committee heads
and leading figures. However, they
cannot stop the movement arranged
by the minions with integrity,
diligent motivation, and perhaps
a risk acceptance that touches
on danger, even naive noble risk.
The entanglement between JPMorgan
Chase and the USGovt has more fallout. Two
senators have responded to the
likelihood of JPMorgue receiving
massive tax breaks as part of their
possible $13 billion settlement
with the government. They want
the tax benefit removed.

The case centers on low quality mortgage securities, misrepresentation, and
shoddy underwriting, whereby investors
lost many $billions. Under the
current law, firms can write off
parts of a settlement that are
not directly paid to the government.
Of the reported $13 billion being
reported, $5.1 billion of the settlement
is with Fannie Mae (FNMA) and Freddie
Mac (FMCC), which is eligible for
tax deductibility. The benefit
would come to about $1.5 billion
from a write-off. Senators Jack
Reed (Rhode Island) and Charles Grassley (Iowa) have introduced legislation to shut down such accounting write-offs,
thus to eliminate the benefit. Their
Government Settlement Transparency & Reform
Act, a bipartisan initiative, seeks
to close a loophole that has allowed
some corporations to reap tax benefits
from payments to settle severe
malfeasance. In almost all cases,
the settlement involves egregious
fraud but no admission of guilt.
The Jackass has called the practice,
as turning criminal activity into
a business cost.

◄$$$ JPMORGUEN AND BANK OF AMERICA CONTINUE TO BLEED
ON LEGAL CASES. THE MORTGAGE NIGHTMARE
WAS NEVER EFFECTIVELY SHOVED UNDER
THE RUG IN 2008 AND 2009. THE USGOVT
NATIONALIZATIONS AND TARP FUND
TREATMENT ARE COMING UNDONE. THE
ROT AND STENCH FROM MALFEASANCE
IS RISING TO THE SURFACE. MOREOVER,
WITNESS MANEUVERING POSSIBLY BY
GOLDMAN SACHS TO WEAKEN ITS RIVAL,
IN ORDER TO GAIN A COMMERCIAL BANK
CORE NUCLEUS. $$$

JPMorgan Chase has agreed to pay $5.1 billion to settle
Federal Housing Finance Agency
claims. They relate to home loans
and mortgage backed securities
the company sold to Fannie Mae
and Freddie Mac. The
payment resolves part of a $13
billion settlement pact being
negotiated with the USGovt. The
deal includes $4 billion to bring
closure the FHFA lawsuit initiated
in 2011, the charge being JPM
sold a boatload of faulty mortgage
bonds to Fannie Mae and Freddie
Mac. The remaining $1.1 billion
settles claims that the big syndicate
bank sold their own defective
loans later packaged into their
own private label securities.
There is more. JPMorgan seeks
to settle state and federal probes
into whether the company misrepresented
the quality of mortgage bonds
packaged and sold. To be sure,
JPM did not admit any malfeasance
or criminal fraud in the FHFA
deal, and of course nobody will
go to jail, certainly no corporate
officers or board members. See
the Bloomberg article (CLICK HERE).

Bank of America has been found liable for Countrywide fraud and malfeasance,
a jury has found. The grand
restructure of the Wall Street
banks did not avert the the transferred
liability, which is subject to
prosecution. The wheels of
justice grind slowly. The inner
sanctum battle for survival continues
among the big US banks, with Goldman Sachs
likely doing much of the controlled
actions from the perch. The shark
tank is becoming rich with blood
from the big banks. They have accelerated
the process of eating their own
in order to assure survival. It
is very likely GSax is trying to
weaken JPMorgue and Bank of America
so that they can pounce on a few
pieces. GSax lusts for a commercial
bank core nucleus. Beneath the
headlines, witness potential desperation
on the part of GSax to use the
USGovt and its tools to pursue
banks in their own back yard. Witness
desperation. GSax urgently requires
a commercial bank structure and
body, not just title. They are
a king without a kingdom. See the
Market Watch article (CLICK HERE).

◄$$$ THE USCONGRESS REPEATED WHAT THEY DID IN APRIL 2009 ON ACCOUNTING
REGULATIONS. IN EARLY NOVEMBER
THEY MOVED TO ROLL BACK THE DODD-FRANK
FINANCIAL REGULATIONS FOR MAINTENANCE
OF DERIVATIVE COLLATERAL. THE BILL
WOULD ELIMINATE ONCE AGAIN THE
REGULATORY OVERSIGHT OF DERIVATIVES.
THE BIG US-BANKS ARE DEADER THAN
DEAD, HOLLOWED GUTTED PILLARS.
THEY WOULD NOT SEEK REFORM ROLLBACK
IF NOT IN DIRE CONDITION. CONSIDER
THE BIG US-BANKS AT DEATH'S DOOR,
FIVE YEARS AFTER THE LEHMAN KILL.
$$$

Congress just did a lulu, serving as signal of a deep desperation among the
Wall Street banks. The Jackass
speculates that they suffered as
a group a tremendous capital loss
in 2008, to become walking dead.
But go further. The combination
of reversed USTBond carry trade
losses, plus amplified Interest
Rate Swap derivative losses this
summer, have served up a nasty
enormous devastating capital loss
cocktail. In 2008 they went
insolvent. But in 2013 they lost
their newly acquired capital from
the carry trade as part of the
USFed initiative to restore their
capital replenishment. One must
conclude that the USFed was ordered
to do the Taper Talk Test, which
rendered tremendous damage. One
might conclude that the Chinese
did much of the selling of USTBonds
this summer. Regardless, the current
status of the Wall Street banks
stinks of desperation, open sweat
that fills the air. It is also
possible that the Bank For Intl
Settlements ordered the Taper Talk,
in order to start the collapse
momentum that would bring about
the long-awaited global fascist
state.

In 2010, Congress passed the Dodd-Frank law (also called the Fin-Reg Bill)
to clamp down on risky derivatives
trading. It is often blamed for
much of the financial collapse
of 2008, set up by the housing
bust that took down mortgage bonds.
The Fin-Reg Bill was weakened by
banking lobbyists from the start,
with several rounds provisions
included during the drafting of
its original legislation. The final
bill does not resemble the first
drafted bill, before the bank lobby
influenced the formal process.
It has been under attack by those
well-funded bank lobbyists ever
since. Enter a new law written
by Citigroup lobbyists in the last
month, which exempts derivatives
trading from regulation.

The reform bill HR922 was passed early in November by the House of Representatives
with broad bipartisan support.
It permits the banks to go back
to the same set of rules that let
them fracture the financial structures
in the first place. They sensed
a threat of systemic failure, and
responded by rolling back the derivatives
regulations. The USCongress easily
buckled, tools to the syndicate.
Appearances will be maintained,
but the structural damage must
be great. Their goal might be to
avoid the visibility of failure,
when they fail soon. See the Zero
Hedge article (CLICK HERE).
Notice a repeat of history, or
rhyme. The USCongress repeated
what they did in April 2009 on
accounting regulations. The big US banks are on the verge of total annihilation,
as in failure, not just insolvency.
The derivatives must be draining
their cash position, used to defend
against bank failure using leverage.
Regard it as ammunition used for
cannon and artillery fire against
their fortress.

◄$$$ AUSTRALIAN BAIL-IN LAWS ARE COMING SOON, ON TRACK WITHIN THE LEGAL
SYSTEM. THE NEXT BAIL-IN EVENT
MIGHT ACTUALLY OCCUR IN AUSTRALIA.
THE SYSTEM IS READY. THE LANDLORDS
ARE PART OF THE CARTEL. $$$

The ugly Bail-in is not due to occur immediately. Be sure to know that it constitutes
confiscation of private account
wealth, with no remote potential
of restoring capital stability
to the banks that perpetrate the
thefts. The event could happen
before the next G-20 Meeting of
finance ministers in Brisbane,
to be held in November 2014. Their
Financial Stability Board, chaired
by Goldman Sachs, has given full
approval of Bail-ins to restore
stability. The Australian Financial
Markets Association (AFMA) made
their position very clear, writing "The
FSB's Key Attributes lays out its
principles for executing a bail-in
within resolution. We welcome the
role of the bail-in tool for a
resolution." Furthermore,
the Bail-in of Australian banks is an
FSB requirement, one that will
be enforced by APRA as the Australian
official resolution authority,
under new so-called robust statutory
powers. Apparently they even have
the computer software in place
to sweep accounts in New
Zealand. Recall
the NZ banks are owned by the Australian
banks, as pointed out in a recent
Hat Trick Letter report. See the
Barnaby Right article (CLICK HERE and HERE).